This paper studies fi scal federalism when voter information varies across regions. We develop a model of political agency with heterogeneously informed voters. Rent-seeking politicians provide public goods to win the votes of the informed. As a result, rent extraction is lower in regions with higher information. In equilibrium, electoral discipline has decreasing returns. Thus, political centralization efficiently reduces aggregate rent extraction. The model predicts that a region' s benefi ts from centralization are decreasing in its residents' information. We test this prediction using panel data on pollutant emissions across U.S. states. The 1970 Clean Air Act centralized environmental policy at the federal level. In line with our theory, we fi nd that centralization induced a differential decrease in pollution for uninformed relative to informed states.

Centralization and Accountability: Theory and Evidence from the Clean Air Act.

BOFFA, FEDERICO;
2012-01-01

Abstract

This paper studies fi scal federalism when voter information varies across regions. We develop a model of political agency with heterogeneously informed voters. Rent-seeking politicians provide public goods to win the votes of the informed. As a result, rent extraction is lower in regions with higher information. In equilibrium, electoral discipline has decreasing returns. Thus, political centralization efficiently reduces aggregate rent extraction. The model predicts that a region' s benefi ts from centralization are decreasing in its residents' information. We test this prediction using panel data on pollutant emissions across U.S. states. The 1970 Clean Air Act centralized environmental policy at the federal level. In line with our theory, we fi nd that centralization induced a differential decrease in pollution for uninformed relative to informed states.
2012
File in questo prodotto:
File Dimensione Formato  
Working Paper Tilburg.pdf

accesso aperto

Tipologia: Documento in post-print (versione successiva alla peer review e accettata per la pubblicazione)
Licenza: DRM non definito
Dimensione 600.89 kB
Formato Adobe PDF
600.89 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11393/133623
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact