تمرکز زدایی و تمرکز مالی تحت یک قاعده اکثریت : تجزیه و تحلیل اصولی
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|3096||2006||15 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Economic Systems, Volume 30, Issue 1, March 2006, Pages 41–55
In his seminal work on fiscal federalism, Oates [Oates, W., 1972. Fiscal Federalism. Harcourt Brace Jovanovich, New York, NY] addressed the so-called Decentralization Theorem, which states that, if such factors as scale economies and spillovers are left out of consideration, a decentralized system is always more efficient than a centralized system for supplying local public goods. Based on his analytical framework, we show that a decentralized system may at times be inferior in efficiency to a centralized system under a democratic decision rule (Proposition 2). An intuition for this result is that, under majority rule, a majority may choose an extreme policy in a local district that best matches its own preference but ignores the interests of minorities. In some cases, such disregard of minority taste may result in a considerable loss of efficiency. If instead some moderate policies are chosen through voting in an integrated constituency, then the interests of minorities could be better served to some extent. As a result, centralization would improve social welfare.
In this paper, we construct a model of two-tier constituencies with intra- and interdistrict heterogeneity, and examine comparative efficiency between decentralized and centralized systems for the supply of a public service under majority rule. We pay special attention to the interests of minorities in each local district, which a decentralized system may ignore but a centralized system may take into account rather better. Comparative efficiency between decentralization and centralization in the supply of local public goods has long been examined in the literature of fiscal federalism. Conventionally, goods and services supplied by a public enterprise are assumed uniform in the constituency. In particular, it is assumed that residents in different local districts are provided with the same level of local public goods by the central government.1 Based on the assumptions of uniformity and benevolent governments, Oates (1972) addressed the well-known Decentralization Theorem. For the supply of local public goods, the theorem states that local governments, which respectively choose the amount of public goods for their own local districts, are always more efficient than the central government, which provides a uniform amount of public goods to all local districts.
نتیجه گیری انگلیسی
Based upon a conventional model of fiscal federalism where provision of a local public service is restricted to be uniform under centralization, this paper examined the implications of a majority rule for comparative efficiency between decentralized and centralized systems. Without incorporating into the model such extra factors as scale economies and spillovers, we obtained a result that is contrary to Oates’ (1972) Decentralization Theorem; i.e., decentralization is at times inferior in efficiency to centralization. The key factor that produces such a result is the existence of minority residents whose interests are ignored by majority voting under decentralization. That is, if there is a wide divergence of taste for the public service between the majority and minorities, a policy will be chosen that is preferred best by the majority but that is far from minority preferences. The interests of minorities are thus ignored under a decentralized system. If the distribution of taste for the public service were leveled down and up by integrating the local districts, and, as a result, some milder policies were chosen by majority voting in the greater constituency, then those minorities would be better off. Social welfare could thus be increased by centralization. We will conclude the paper with a discussion about the policy implications of our results from a broader perspective. Panizza (1999) empirically detected the tendency that progress in democracy promotes fiscal decentralization. If minorities’ interests are in fact harmed more seriously under a decentralized system than under a centralized system, as was shown in our study, then we may have to worry about the negative outcome of the recent trend of democratization in the international community. Democracy is no doubt a noble idea, but it is ironic that the resulting decentralization may hurt minorities and might reduce economic efficiency as a whole.