6533b86ffe1ef96bd12ce9f5
RESEARCH PRODUCT
Decentralization as an incentive scheme when regional differences are large
Pierre Salmonsubject
Decentralization[SHS]Humanities and Social SciencesCompetition (economics)Market economyYardstick[ SHS ] Humanities and Social SciencesEconomics[ SHS.ECO ] Humanities and Social Sciences/Economies and financesmedia_common.cataloged_instanceRegional differencesEuropean union[SHS.ECO] Humanities and Social Sciences/Economics and FinanceComputingMilieux_MISCELLANEOUSmedia_commonjel:H70jel:D72DecentralizationConvergence (economics)[SHS.ECO]Humanities and Social Sciences/Economics and FinanceIncentiveyardstick competition;political competition;regional developmentObstacleAccountability[SHS] Humanities and Social SciencesEconomic systemjel:R11description
It has been suggested that large regional differences could be an obstacle to that part of the political accountability of office-holders which is based on yardstick competition among governments. The paper addresses that question and concludes that the obstacle is not too serious in general. The second part of the paper is devoted to the persistent economic underperformance of some regions in countries such as Germany, Italy and (with regard to regions overseas) France. How is it that the mechanism of yardstick competition induces a convergence of economic performance among European Union member countries, even those particularly poor initially, but fails to induce all the underperforming regions of these countries to catch up? A small model is used to explore that question. In the case of the persistently underperforming regions, it turns out that the degree of regional differentiation is not sufficient for yardstick competition to work and bring about an improvement in performance. The yardstick competition framework remains useful if it helps to understand more clearly why this is so.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2010-01-01 |