This Article Full Text (PDF) References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Request Permissions Request Reprints Add to My Marked Citations Citing Articles Citing Articles via Google Scholar Citing Articles via Scopus Google Scholar Articles by Schwager, R. Search for Related Content Social Bookmarking                         What's this?

The Theory of Administrative Federalism: An Alternative to Fiscal Centralization and Decentralization

Otto-von-Guericke-Universität

Under administrative federalism, the central state sets quality standards for public projects and the local jurisdictions decide which projects are carried out. Decentralized decisions suffer from an interjurisdictional spillover. The central state cannot distinguish between useful and useless projects. It is shown that administrative federalism is always preferable to decentralization. This is due to the distinction between the net benefit of increasing the quality level for all projects and the net benefit of carrying out an additional project. If the information problem is sufficiently important, administrative federalism also is preferable to centralization. Finally, it may even implement the first best solution.

Public Finance Review, Vol. 27, No. 3, 282-309 (1999)
DOI: 10.1177/109114219902700303


CiteULike    Complore    Connotea    Del.icio.us    Digg    Reddit    Technorati    Twitter    What's this?