Endogenous Policy Decentralization: Testing the Central Tenet of Economic Federalism
Author(s) -
Koleman Strumpf,
Felix OberholzerGee
Publication year - 1999
Publication title -
ssrn electronic journal
Language(s) - English
Resource type - Journals
ISSN - 1556-5068
DOI - 10.2139/ssrn.151009
Subject(s) - decentralization , federalism , fiscal federalism , economics , political science , public economics , economic policy , politics , market economy , law
The economic theory of federalism is largely built around the premise that more heterogeneous preferences result in more decentralized policy making. Despite its prominence and importance, this central tenet of economic federalism has never been empirically evaluated. This paper presents the first formal test of the link between preference heterogeneity and endogenous policy decentralization using as a case study liquor control in the United States over the period 1934–70. The results are reassuring: States with more heterogeneous preferences are more likely to decentralize liquor control and allow for local government decision making.
Accelerating Research
Robert Robinson Avenue,
Oxford Science Park, Oxford
OX4 4GP, United Kingdom
Address
John Eccles HouseRobert Robinson Avenue,
Oxford Science Park, Oxford
OX4 4GP, United Kingdom