{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

PE Powerpoint Part BW 10

PE Powerpoint Part BW 10 - Public Economics Principles and...

Info icon This preview shows pages 1–12. Sign up to view the full content.

View Full Document Right Arrow Icon
Public Economics Principles and Practice Part Ten Multi-Government Systems Peter Abelson Applied Economics and University of Sydney
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Multi-Government Systems Multilevel Government Globalisation and Government
Image of page 2
Chapter 33 Multilevel Government Allocation of Functions in a Multilevel System Optimal Size of Local Governments Taxation with Multilevel Governments Household Choices and Local Government Intergovernmental Transfers Multilevel Government in Australia
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Tiers of Government Multilevel government exists in centralised states as well as in federations.
Image of page 4
Allocation of Functions in a Multilevel System Macroeconomic management: Aligning total expenditure with economic capacity is a central responsibility. Sub-national governments: Should not have independent monetary policy Have limited macroeconomic influence because of leakages May distort efficient allocation of resources But judicious use of local fiscal policy may make marginal differences
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Distributional policies Mainly central government responsibility. Only central government can achieve horizontal equity across country. Sub-national redistribution may be ineffective and counter-productive. However most local communities want (legitimately) to have some redistribution programs.
Image of page 6
Allocation functions: public goods Decentralisation theorem: Decentralisation maximises economic welfare by equilibrating supply of services to demand. Subsidiarity principle: Subject to cost considerations, public services should be supplied by the level of government closest to the users of the service.
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Decentralisation theorem
Image of page 8
Problems with shared responsibilities Major problems can arise when different levels of government share responsibilities. r.g in health and education. This is hard to avoid in federations but also in centralised countries.
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Optimal Size of Local Governments Considerations similar to those for supply of public goods. Diversity of preferences points to small areas. Cost efficiency points to larger areas. One problem: optimal size may vary by type of public good provided. There is a shortage of empirical studies. Most studies of costs of services in areas of different sizes focus on technical possibilities rather than behavioural factors. There are few studies of effects of area size on demand and preference satisfaction. More research is needed.
Image of page 10
Taxation with Multilevel Governments Criteria for taxes: Distributional (equity) objectives Allocative efficiency (minimise deadweight losses) Fiscal adequacy. Accountability. Two problems Central taxes best meet first two criteria, but this creates problems for other two criteria.
Image of page 11

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 12
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern