In this paper we abstract from the usual gains and costs of decentralization (e.g. preference matching, spillovers and economies of scale). Instead we compare the political accountability of decentralized governments relative to centralized ones when there is a risk of bad governance. We study...

This paper studies the relationship between fiscal decentralization and electoral accountability, by analyzing how decentralization impacts upon incentive and selection effects, and thus on voter welfare. The model abstracts from features such as public good spillovers or economies of scale, so...

This paper explores the impact of intensified tax competition within federal systems characterized by the presence of both horizontal tax externalities between the states and vertical tax externalities between states and federal government. It shows that although these point in opposite...