Federalism as a Commitment to Preserving Market Incentives | Zendy

Yingyi Qian | Zendy; Barry R. Weingast | Zendy

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Federalism as a Commitment to Preserving Market Incentives

Author(s) -

Yingyi Qian,

Barry R. Weingast

Publication year - 1997

Publication title -

the journal of economic perspectives

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 9.614

H-Index - 196

eISSN - 1944-7965

pISSN - 0895-3309

DOI - 10.1257/jep.11.4.83

Subject(s) - federalism , decentralization , incentive , fiscal federalism , salient , corporate governance , economics , cooperative federalism , state (computer science) , competition (biology) , public economics , market economy , political science , finance , politics , law , ecology , algorithm , computer science , biology

The authors advance a new perspective in the study of federalism. Their approach views federalism as a governance solution of the state to credibly preserving market incentives. Market incentives are preserved if the state is credibly prevented from compromising on future economic success and from bailing out future failures. The salient features of federalism--decentralization of information and authority and interjurisdictional competition--help provide credible commitment or these purposes. In addition, the authors suggest that some federalism are self-sustaining.

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