Publication

This paper examines the trade-offs between centralization and decentralization in public decision-making. According to the authors, the decision to allocate policy jurisdictions to different levels of government is related to a number of trade-offs between the advantages and disadvantages of centralized versus decentralized provision. They examine the trade-off between the internalization of externalities under centralization versus an "accountability" advantage of decentralization. They formalize this trade-off in the context of a class of principal-agent models known as "common agency."