Resource title

Think locally, act locally: spillovers, spillbacks, and efficient decentralized policymaking

Resource image

image for OpenScout resource :: Think locally, act locally: spillovers, spillbacks, and efficient decentralized policymaking

Resource description

In this paper, we analyze a class of models in which there are interjurisdictional spillovers among heterogeneous jurisdictions, as illustrated for instance by CO2 emissions that affect the global environment. Each jurisdiction s emissions depend upon the local stock of private capital. Capital is interjurisdictionally-mobile and may be taxed to help finance local public expenditures. We show that decentralized policymaking leads to efficient resource allocations in important cases, even in the complete absence of corrective interventions by higher-level governments or coordination of policy through Coasian bargaining. In particular, even when the preferences and production technologies differ among the agents, the decentralized system can still result in globally efficient allocation.

Resource author

Hikaru Ogawa, David E. Wildasin

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26186

Resource license

Adapt according to the presented license agreement and reference the original author.