File2-page234 - Besley & Ghatak (Mimeo) Decentralisation...

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Decentralisation and NGOs (1) heterogeneity in social needs: preferences and the nature of risks are likely to vary across jurisdictions and decentralisation allows citizens to express their preferences over the level and composition of spending on social protection. (centralisation: one size Fts all) (2) Spillovers: wherever public goods produced in one jurisdiction are val- ued by and beneFt the greater community, then there will be a tendency to under-provide these goods as provision will only re±ect local beneFts, e.g., potential mobility of the poor towards areas with high levels of as- sistance will force individual localities to be excessively parsimonious in their social protection programmes. Taken in a dynamic context, this would lead to a “race to the bottom,” as localities undercut provision as a means of preventing immigration of the poor. Institutional Arguments In a world where an all powerful, perfectly informed and benevolent so-
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This note was uploaded on 12/29/2011 for the course ECO 307 taught by Professor Dublin during the Spring '10 term at SUNY Stony Brook.

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