Güth, Werner; Levati, Vittoria; Sausgruber, Rupert - In: Public Choice 125 (2005) 1, pp. 171-188
We consider an economy composed of two regions. Each of them provides a public good whose benefits reach beyond local boundaries. In case of decentralization, taxes collected by members of a region are spent only on that region's public good. In case of centralization, tax receipts from the two...