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- handle: 10670/1.725w1y
- hal: hal-01012721
- doi: 10.1007/s10797-014-9311-6
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info:eu-repo/semantics/altIdentifier/doi/10.1007/s10797-014-9311-6
Mots-clés
Spillovers Tax competition Oates' decentralization theorem Fiscal federalism Household mobility H - Public Economics/H.H7 - State and Local Government • Intergovernmental Relations/H.H7.H77 - Intergovernmental Relations • Federalism • Secession H - Public Economics/H.H7 - State and Local Government • Intergovernmental Relations/H.H7.H70 - General H - Public Economics/H.H4 - Publicly Provided Goods/H.H4.H41 - Public GoodsSujets proches
Mobility Internal migrationCiter ce document
Francis Bloch et al., « Oates' Decentralization theorem with Imperfect Household Mobility », HAL-SHS : économie et finance, ID : 10.1007/s10797-014-9311-6
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Résumé
This paper studies how Oates' trade-off between centralized and decentralized public good provision is affected by changes in households' mobility. We show that an increase in household mobility favors centralization. This results from two effects. First, mobility increases competition between jurisdictions in the decentralized régime, resulting in lower levels of public good provision. Second, while tyranny of the majority creates a gap between social welfare in different jurisdictions in the centralized régime, mobility allows agents to move to the majority jurisdiction, raising average social welfare. Our main result is obtained in a baseline model where jurisdictions first choose taxes, and households move in response to tax levels. We show that the result is robust to changes in the objective function and the strategic variable of local governments.