The economic analysis of the electoral systems and the provision of local public goods

Abstract

In this paper, we analyze whether it can decrease the inefficiency of policy making by voting, which it was seen in Lizzeri and Persico (2001), by the central government and about the problem of allocation of political authority between the local and central government which can choose local public goods provision policy or redistribution policy of income. In Lizzeri and Persico (2001), the candidate who promises the provision of local public goods is not always chosen by voters even though the value of local public goods is high. This is inefficient in the view of social welfare. However, in case this local public goods has spillover effect and the central government has the information about desirable public goods for this region sufficiently, it is desirable to give the political authority to the central government in the view of social welfare. As the value of public goods increase, the domain it is desirable to give the political authority to the central government expands in Winner-take all-system. Conversely, in proportional-system, this domain is getting narrow with increasing of the value of one. © 2002, JAPAN SECTION OF THE REGIONAL SCIENCE ASSOCIATION INTERNATIONAL. All rights reserved.