Transfers in a polarized country: bridging the gap between efficiency and stability

by: Ori Haimanko, Michel Le Breton, Shlomo Weber

Journal of Public Economics, Vol. 89, No. 7. (July 2005), pp. 1277-1303.

View FullText article

DOI, ScienceDirect

Reviews [Write a review of this article]

There are no reviews of this article

Find related articles from these CiteULike users

dir289, Sexonomics (group)

Find related articles with these CiteULike tags

poum

Abstract

We consider a political economy model of country whose citizens have heterogeneous preferences for a national policy and some regions may contemplate a threat of secession. The country is efficient if its breakup into smaller countries leads to an aggregate utility loss. We show that in an efficient country whose citizens' preferences exhibit a high degree of polarization, a threat of secession cannot be eliminated without inter-regional transfers. We also demonstrate that if majority voting is used to determine the redistribution schemes within the country, then a high degree of polarization yields the full-compensation scheme as the unique political equilibrium.

@article{citeulike:1630127, abstract = {We consider a political economy model of country whose citizens have heterogeneous preferences for a national policy and some regions may contemplate a threat of secession. The country is efficient if its breakup into smaller countries leads to an aggregate utility loss. We show that in an efficient country whose citizens' preferences exhibit a high degree of polarization, a threat of secession cannot be eliminated without inter-regional transfers. We also demonstrate that if majority voting is used to determine the redistribution schemes within the country, then a high degree of polarization yields the full-compensation scheme as the unique political equilibrium.}, author = {Haimanko, Ori and Le Breton, Michel and Weber, Shlomo }, booktitle = {The Economics of Political Integration and Disintegration}, citeulike-article-id = {1630127}, doi = {http://dx.doi.org/10.1016/j.jpubeco.2004.05.010}, journal = {Journal of Public Economics}, keywords = {poum}, month = {July}, number = {7}, pages = {1277--1303}, posted-at = {2007-09-07 10:22:27}, priority = {2}, title = {Transfers in a polarized country: bridging the gap between efficiency and stability}, url = {http://dx.doi.org/10.1016/j.jpubeco.2004.05.010}, volume = {89}, year = {2005} }

RIS record

TY - JOUR ID - citeulike:1630127 L3 - citeulike-article-id:1630127 N2 - We consider a political economy model of country whose citizens have heterogeneous preferences for a national policy and some regions may contemplate a threat of secession. The country is efficient if its breakup into smaller countries leads to an aggregate utility loss. We show that in an efficient country whose citizens' preferences exhibit a high degree of polarization, a threat of secession cannot be eliminated without inter-regional transfers. We also demonstrate that if majority voting is used to determine the redistribution schemes within the country, then a high degree of polarization yields the full-compensation scheme as the unique political equilibrium. IS - 7 JF - Journal of Public Economics EP - 1303 TI - Transfers in a polarized country: bridging the gap between efficiency and stability VL - 89 T2 - The Economics of Political Integration and Disintegration SP - 1277 KW - poum AU - Haimanko, Ori AU - Le Breton, Michel AU - Weber, Shlomo PY - 2005/07// UR - http://dx.doi.org/10.1016/j.jpubeco.2004.05.010 ER -

RIS BibTeX RTF/PDF