The paper discusses moral hazard problems as a potential reason for the observed strong increase of indebtedness of German states (Länder). Indeed, financial markets do not react much to the strong differences in fiscal fundamentals of German Länder. Using a case study, the paper also shows...

Federal transfers can depend on local fiscal capacity which is measured by local tax bases. The aim of this paper is to understand to what extent and how these transfers affect local tax decisions. We develop a model with two provinces producing one mobile good. The good is taxed according to...

This paper explores the prospects of success of ‘Local Economic Development’ (LED) for the less developed countries. The concept had much success in the context of the developed world. The less developed countries, however, present a scenario where power and social structures present a...

Corruption is a problem that has been shown to adversely affect a country’s development. Recent studies have shown that a country’s electoral system can affect its corruption level. But if that is the case, then electoral rules could be chosen to maximize opportunities for corruption. This...

This paper explored the yardstick competition among Japanese municipalities in providing medical subsidy for infants and children. In recent years, against the background of rapidly declining birthrate in Japan, municipalities aimed to reduce the medical burden of families with small children....

The international community is usually set against secessionist movements that threaten to break up existing states. At the same time, many fragmented countries receive development aid, which influences the political process there. The model presented here seeks to answer two questions: “Is...

The aim of this paper is to present the theoretical basis of public diplomacy and the characteristics of methods and areas of cross-border cooperation conducted by local governments in Podlaskie Voivodship. Report, in particular, draws attention to the civic and local government dimension of...

The number of municipalities in Japan has decreased from 3,232 in 1999 to 1,820 in 2006 because of municipal mergers, called Heisei-no-Daigappei. This paper estimates the political choices of local council members in Japan’s municipal mergers. In Japan, being a local council member is a...