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AbstractAn examination of the extent of state administrative control over local units of government and an evaluation of the ability of the state to meet the requirements of the additional functions it has undertaken.

Thirteen years ago, the American Political Science Association directed its attention to the changing relation between our national government and the states. One of the speakers discerned in the tendency toward aggrandizement of national power, manifestations of the principle that sovereignity, unprovided for in extant forms, seeks to embody itself in new forms. The signal incompetence of the states in dealing with economic questions, together with their mendicant attitude towards the national government, was seen as the cause of the transfer to national authority of control over currency supply, transportation rates and methods, and the seeming disposition to transfer control over all corporations. Other speakers called attention to the great increase of national power under the commerce clause and under the Fourteenth Amendment of the Constitution; and one, in a most thoughtful paper, openly challenged the federal system as established in this country, asserting that it showed disadvantages of increasing magnitude in comparison with a unitary system, and was out of harmony with the general environment of modern industrialism.

This paper presents a positive theory of (de)centralization of policy decisions in an international union -defined as a supranational jurisdiction that may exercise a policy prerogative on behalf of member countries. I build a benchmark model where national lobbies can coordinate (i.e. form a trans-national lobby) at no cost and show that lobbying does not affect the fiscal regime. On the other hand, when interest groups cannot coordinate, decentralization emerges as a political equilibrium with lobbying. Policy centralization hurts national lobbies by increasing competition for influence. At a constitutional stage, interest groups induce politically motivated governments to reject centralization. Three extensions show that this result depends on the level of cross-border externalities; the voting rule at the constitutional stage; and the details of the institutional decision mechanism under centralization. Adapted from the source document.

In this paper we abstract from the usual gains and costs of decentralization (e.g. preference matching, spillovers and economies of scale). Instead we compare the political accountability of decentralized governments relative to centralized ones when there is a risk of "bad" governance. We study both the selection and incentive effects of accountability. A key aspect of centralization is to make the politician answerable to multiple constituencies subject to a common budget constraint. Our main findings are that (a) when politicians differ in competence, decentralization unambiguously dominates; and (b) when politicians differ in honesty, decentralization and centralization have conflicting accountability effects (when one provides better discipline, the other gives better selection). The analysis then identifies the circumstances under which centralization may increase voter welfare. The more general lesson that we can draw is that different institutional forms give rise to different information to the voters on which electoral accountability can be based. Therefore they differ on how effective elections can be in disciplining and selecting policymakers.

In this paper we abstract from the usual gains and costs of decentralization (e.g. preference matching, spillovers and economies of scale). Instead we compare the political accountability of decentralized governments relative to centralized ones when there is a risk of "bad" governance. We study both the selection and incentive effects of accountability. A key aspect of centralization is to make the politician answerable to multiple constituencies subject to a common budget constraint. Our main findings are that (a) when politicians differ in competence, decentralization unambiguously dominates; and (b) when politicians differ in honesty, decentralization and centralization have conflicting accountability effects (when one provides better discipline, the other gives better selection). The analysis then identifies the circumstances under which centralization may increase voter welfare. The more general lesson that we can draw is that different institutional forms give rise to different information to the voters on which electoral accountability can be based. Therefore they differ on how effective elections can be in disciplining and selecting policymakers.