Partial decentralization as a safeguard against favoritism

Cortes, Darwin

Ítem

Acceso Abierto

Partial decentralization as a safeguard against favoritism

http://repository.urosario.edu.co/handle/10336/10827
https://doi.org/10.48713/10336_10827

Autores

Cortes, Darwin

Archivos

HTML

PDF

Fecha

2010-09

Editor

Universidad del Rosario

Citations

Métricas alternativas

Abstract

In this paper I investigate the optimal level of decentralization of tasks for the provision of a local public good. I enrich the well-known trade-off between internalization of spillovers (that favors centralization) and accountability (that favors decentralization) by considering that public goods are produced through multiple tasks. This adds an additional institutional setting, partial decentralization, to the classical choice between full decentralization and full centralization. The main results are that partial decentralization is optimal when both the variance of exogenous shocks to electorate’s utility is large and the electorate expects high performance from politicians. I also show that the optimal institutional setting depends on the degree of substitutability / complementarity between tasks. In particular, I show that a large degree of substitutability between tasks makes favoritism more likely, which increases the desirability of partial decentralization as a safeguard against favoritism.