Economics of Federalism
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Description
This chapter provides an overview of the political economy of federalism. The core of the chapter focuses on the classic Tiebout framework and its support for a decentralized federal system. However, it goes beyond the Tiebout world in suggesting a framework that is expanded to take into account bargaining among governmental units. The chapter also describes political models of legislative and executive branch decision-making that suggest the potential benefits and costs associated with centralized government. Ultimately, the choice of an “optimal” level of decentralization depends on the relative importance one places upon economic efficiency and the potentially competing values of political participation, economic fairness, and personal rights and liberties.
Source Publication
Oxford Handbook of Law and Economics
Source Editors/Authors
Francesco Parisi
Publication Date
2017
Volume Number
3
Recommended Citation
Inman, Robert P. and Rubinfeld, Daniel L., "Economics of Federalism" (2017). Faculty Chapters. 1817.
https://gretchen.law.nyu.edu/fac-chapt/1817
