Bulletin n. 1/2012 | ||
June 2012 | ||
Lisa Grazzini and Alessandro Petretto |
||
Voting on devolution in a federal country with a bicameral national system | ||
in Economics of Governance , volume 13 n.1 , 2012 , 51-79 | ||
We analyse voting on the devolution of the responsibilities for the provision of public goods to local governments in a federal country, with a bicameral national legislature. In our set-up, devolution means a constitutional fiscal reform which reduces federal public expenditure on a local public good, and simultaneously increases the transfers received by regions, via a tax-sharing mechanism. This allows the regions to provide a greater amount of a local public good which can compensate for the reduction of that provided upon a federal basis. We show under which conditions such a devolution reform is adopted or rejected. | ||