Love Thy Neighbour'? The Effect of Income and Language Differences on Votes for Municipal Secessions
In: VATT Institute for Economic Research Working Papers 107
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In: VATT Institute for Economic Research Working Papers 107
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Working paper
Between 1945 and 2008, the number of internationally-recognised countries grew from 74 to 193 (Spolaore, 2008). More recently, many countries experienced increasing decentralisation. In OECD countries, for example, the number of sub-national governments reached 140,000 in 2014. Moreover, these sub-national governments have an increasing influence in these countries (OECD, 2014). Given these trends towards an increasing decentralisation, this thesis studies two aspects of it: fiscal competition, and the endogenous choice of borders. In terms of fiscal competition, this thesis studies the competition between regional governments to attract one of a firm's new plants. The goal of this analysis is to study the strategic behaviour of the firm in such competitions or location contests. Indeed, in contrast to the existing literature on the subject that considers only firms producing in a single location, the first chapter of this thesis shows that the firm can modify its allocation of production across sites by differentiating the plants, thus attracting larger subsidies. In the second chapter, this thesis studies how the addition of prior investment in infrastructure by the regions before the location contest affects both the competition between the regions, and the behaviour of the firm. In terms of endogenous border choice, this thesis provides two analyses: one empirical and one experimental. In the third chapter, this thesis studies the decision of voters in 213 cities of Quebec to secede from a municipal merger that was imposed to them a few years earlier. The analysis reveals that voters choose secession more when the language and income differences between their own town and the other towns in the same merger are larger. The analysis also reveals that these two effects are not independent. Indeed, income differences have a larger effect when language differences are also large. Given the importance of language differences in the formation of ethnic groups in Quebec, these results suggest that the choice of ...
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Between 1945 and 2008, the number of internationally-recognised countries grew from 74 to 193 (Spolaore, 2008). More recently, many countries experienced increasing decentralisation. In OECD countries, for example, the number of sub-national governments reached 140,000 in 2014. Moreover, these sub-national governments have an increasing influence in these countries (OECD, 2014). Given these trends towards an increasing decentralisation, this thesis studies two aspects of it: fiscal competition, and the endogenous choice of borders. In terms of fiscal competition, this thesis studies the competition between regional governments to attract one of a firm's new plants. The goal of this analysis is to study the strategic behaviour of the firm in such competitions or location contests. Indeed, in contrast to the existing literature on the subject that considers only firms producing in a single location, the first chapter of this thesis shows that the firm can modify its allocation of production across sites by differentiating the plants, thus attracting larger subsidies. In the second chapter, this thesis studies how the addition of prior investment in infrastructure by the regions before the location contest affects both the competition between the regions, and the behaviour of the firm. In terms of endogenous border choice, this thesis provides two analyses: one empirical and one experimental. In the third chapter, this thesis studies the decision of voters in 213 cities of Quebec to secede from a municipal merger that was imposed to them a few years earlier. The analysis reveals that voters choose secession more when the language and income differences between their own town and the other towns in the same merger are larger. The analysis also reveals that these two effects are not independent. Indeed, income differences have a larger effect when language differences are also large. Given the importance of language differences in the formation of ethnic groups in Quebec, these results suggest that the choice of voters is sensitive to ethnic differences, and not only to differences in preferences for public goods, as suggested by Alesina, Baqir, and Hoxby (2004). Finally, the last chapter presents the results of a laboratory experiment on the relationship between decentralisation and secession. The literature on the subject suggests the existence of two opposite effects. Decentralisation could quell secessionist movements by giving regions more liberty to take their own public goods decisions, but could also provide additional ressources to secessionist movements, which would reinforce secessionist movements. The results of the experiment show that the total effect of decentralisation is to decrease to probability of votes for secession. ; Entre 1945 et 2008, le nombre de pays reconnus internationalement a augmenté de 74 à 193 (Spolaore, 2008). Plus récemment, plusieurs pays ont vécu une vague croissante de décentralisation. Dans les pays de l'OCDE, par exemple, le nombre de gouvernements infranationaux a atteint 140 000 en 2014. De plus, ces gouvernements infranationaux ont une influence croissante dans ces pays (OCDE, 2014). Compte tenu de ces tendances vers une décentralisation croissante, cette thèse étudie deux aspects de celle-ci : la concurrence fiscale, et le choix endogène des frontières. En matière de concurrence fiscale, cette thèse étudie la mise aux enchères de nouveaux investissements par une firme à plusieurs établissements. Le but de cette analyse est d'étudier le comportement stratégique de la firme dans ce type de concurrence. En effet, contrairement à la littérature déjà existante qui ne considère que des firmes qui ne produisent qu'en un endroit, le premier chapitre de thèse montre que la firme peut modifier l'allocation de ses investissements en les différenciant, pour attirer des subsides plus élevés. Dans le deuxième chapitre, la thèse étudie comment l'ajout de coûts en infrastructure pour les régions avant la mise aux enchères affecte la concurrence entre les régions ainsi que le comportement de la firme. En matière de choix endogène des frontières, cette thèse fournit deux analyses: une empirique, et une expérimentale. Dans le troisième chapitre, la thèse étudie la décision d'électeurs dans 213 villes du Québec de quitter une fusion municipale qui leur fût imposée quelques années auparavant. L'analyse révèle que les électeurs choisissent de faire sécession d'autant plus quand les différences de revenus et de langue entre leur ville et les autres villes dans la même fusion sont plus élevées. L'analyse révèle aussi que ces deux facteurs ne sont pas indépendants. En effet, les différences de revenus ont un effet plus prononcé sur le vote sécessionniste lorsque les différences de langue sont aussi élevées. Étant donné l'importance de la langue comme groupe ethno-linguistique au Québec, les résultats de ce chapitre suggèrent que le choix des électeurs est sensible aux différences ethniques, et non seulement à des différences de goût pour les biens publics, comme suggéré par Alesina, Baqir et Hoxby (2004). Finalement, le dernier chapitre présente les résultats d'un expérience en laboratoire sur le lien entre décentralisation et sécession. La littérature sur le sujet suggère l'existence de deux effets contradictoires. La décentralisation pourrait permettre de contrer les mouvements de sécession en permettant aux régions de prendre plus de décisions à un niveau local, mais pourrait aussi fournir des ressources supplémentaires aux mouvements sécessionnistes, ce qui renforcerait les tendances vers la séparation. Les résultats de l'expérience montre que l'effet total de la décentralisation est de diminuer la probabilité de votes pour la sécession.
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In: VATT Institute for Economic Research Working Papers 115 (2019); ISBN 978-952-274-232-2
SSRN
Working paper
In: Local government studies, Band 44, Heft 4, S. 512-530
ISSN: 1743-9388
In: VATT Institute for Economic Research Working Papers 106
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Working paper
In: Public choice, Band 161, Heft 1-2, S. 209-232
ISSN: 1573-7101
International audience ; The impact of the fragmentation of executive and legislative bodies on the level and composition of government expenditure is a political feature that attracted considerable attention from economists. However, previous authors have abstracted from two important concepts : ideology and intra-party politics. In this paper, we explicitly account for these two phenomenons, and make two main contributions. First, we show that both intra-party and interparty ideological dispersion matters in the level of public spending. Therefore, it is incorrect to consider parties as monolithic entities. We also show that ideological dispersion matters especially for current expenditures, and not so much for investment expenditures. To do so, we construct a panel database (2003 to 2011) including data from a survey that quantifies the policy preferences of individual party members that were candidates to federal elections in Switzerland.
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International audience ; The impact of the fragmentation of executive and legislative bodies on the level and composition of government expenditure is a political feature that attracted considerable attention from economists. However, previous authors have abstracted from two important concepts : ideology and intra-party politics. In this paper, we explicitly account for these two phenomenons, and make two main contributions. First, we show that both intra-party and interparty ideological dispersion matters in the level of public spending. Therefore, it is incorrect to consider parties as monolithic entities. We also show that ideological dispersion matters especially for current expenditures, and not so much for investment expenditures. To do so, we construct a panel database (2003 to 2011) including data from a survey that quantifies the policy preferences of individual party members that were candidates to federal elections in Switzerland.
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In: Public choice, Band 161, Heft 1, S. 209-232
ISSN: 0048-5829
SSRN
Working paper
International audience ; The impact of the fragmentation of executive and legislative bodies on the level and composition of government expenditure is a political feature that attracted considerable attention from economists. However, previous authors have abstracted from two important concepts : ideology and intra-party politics. In this paper, we explicitly account for these two phenomenons, and make two main contributions. First, we show that both intra-party and interparty ideological dispersion matters in the level of public spending. Therefore, it is incorrect to consider parties as monolithic entities. We also show that ideological dispersion matters especially for current expenditures, and not so much for investment expenditures. To do so, we construct a panel database (2003 to 2011) including data from a survey that quantifies the policy preferences of individual party members that were candidates to federal elections in Switzerland.
BASE
International audience ; The impact of the fragmentation of executive and legislative bodies on the level and composition of government expenditure is a political feature that attracted considerable attention from economists. However, previous authors have abstracted from two important concepts : ideology and intra-party politics. In this paper, we explicitly account for these two phenomenons, and make two main contributions. First, we show that both intra-party and interparty ideological dispersion matters in the level of public spending. Therefore, it is incorrect to consider parties as monolithic entities. We also show that ideological dispersion matters especially for current expenditures, and not so much for investment expenditures. To do so, we construct a panel database (2003 to 2011) including data from a survey that quantifies the policy preferences of individual party members that were candidates to federal elections in Switzerland.
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In: Journal of public economics, Band 168, S. 127-145
ISSN: 1879-2316
In: Social choice and welfare, Band 51, Heft 4, S. 681-716
ISSN: 1432-217X