Federalism
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Description
With a topic such as federalism that has been so widely debated from so many perspectives, it would be impossible to provide a comprehensive review of the literature. Rather, we provide a particular perspective, one that balances the twin goals of political participation and economic welfare. To fashion such a balance, we first review the potential virtues of each federalist structure. We conclude that political participation rises with increased decentralization, but economic efficiency first rises and then falls. It is when efficiency declines that we face a trade-off. The choice of an ‘optimal’ level of decentralization ultimately depends upon the relative importance one places upon the competing federalist values of economic efficiency and political participation. JEL classification: K33, H11. Keywords: Political Participation, Voting by Feet, Tiebout, Decentralization
Source Publication
Encyclopedia of Law and Economics
Source Editors/Authors
Boudewijn Bouckaert, Gerrit De Geest
Publication Date
2000
Volume Number
V. The Economics of Crime and Litigation
Recommended Citation
Inman, Robert P. and Rubinfeld, Daniel L., "Federalism" (2000). Faculty Chapters. 1849.
https://gretchen.law.nyu.edu/fac-chapt/1849
