Fiscal Federalism - PAM2040 FiscalFederalism...

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    PAM 2040 Fiscal Federalism
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Fiscal Federalism There are  thousands  of governments in the US Federal State County (~3,141 county-ish places) Municipality
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Fiscal Federalism
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Fiscal Federalism Which governments should do what? Articles of Confederation Little role for National Government (corruption) “The” Constitution National Government expanded, can tax How to protect from corruption? Filibuster BOR- Amendment 10 
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Tradeoffs Efficiency Public Goods Are Not Excludible Externalities Does spending in one jurisdiction affect consumption  in another? Scale Gov’ts vary in ability to raise capital
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Efficient Provision of Public Goods Does level of public good provision match  socially optimal level? Recall median voter model With majority voting, this is who will be represented
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Median Voter in a Representative  Democracy 0% 100%
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Median Voter in a Representative  Democracy 0% 100%
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Heterogeneity in Preferences U A =3F-0.5F 2 U B =F-0.5F 2 F* A =3 F* B =1 F* SWF =2
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This document was uploaded on 10/26/2011 for the course PAM 2040 at Cornell University (Engineering School).

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Fiscal Federalism - PAM2040 FiscalFederalism...

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