Boffa, Federico; Piolatto, Amedeo; Ponzetto, Giacomo A. M. - Institut d'Economia de Barcelona (IEB), Facultat … - 2012
This paper studies fiscal federalism when voter information varies across regions. We develop a model of political agency with heterogeneously informed voters. Rent-seeking politicians provide public goods to win the votes of the informed. As a result, rent extraction is lower in regions with...