Quarterly Journal of Political Science > Vol 2 > Issue 3

Public Goods in Federal Systems

Catherine Hafer, Department of Politics, New York University, USA, Dimitri Landa, Department of Politics, New York University, USA
Suggested Citation
Catherine Hafer and Dimitri Landa (2007), "Public Goods in Federal Systems", Quarterly Journal of Political Science: Vol. 2: No. 3, pp 253-275. http://dx.doi.org/10.1561/100.00006001

Publication Date: 13 Aug 2007
© 2007 C. Hafer and D. Landa
Federalism,  Formal modelling


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In this article:
The Model 


We study a political-economic model of federations with both federal and supplemental regional provision of a local (impure) public good with spillover effects. Regional differences in average income levels and externalities of provision induce differences in preferences over federal and regional levels of provision. Although the voters' preferences are not single-peaked, we provide sufficient conditions for the existence of voting equilibria and characterize their properties under alternative federal institutional arrangements. We show that, under different conditions on parameters, the voting equilibria display markedly different patterns of federal vs. local provision, relying on different political coalitions for their support. We show that the inter-regional redistributive tensions present in federations lead to differences in regional support for different degrees of fiscal (de-)centralization: federation, confederation, and complete centralization.