Four essays on efficiency implications of labor attachment on the provision of public goods in economically autonomous regions.

摘要

In the first three chapters, we examine situations under which a federal system characterized by decentralized leadership entails an efficient allocation of resources in the presence of interregional spillovers and household attachment. Regional governments, the central government and residents play a three-stage game, in which regional governments are Stackelberg leaders and the center is a common Stackelberg follower. Regional governments decide how much of the public goods they should provide and the center designs an income redistribution policy. Given those policies, residents select their residential location. In chapter 1, we show that the subgame perfect equilibrium for the decentralized leadership game is socially efficient despite the degree of labor mobility provided that regional preferences are quasilinear and the center's preferences over regional welfare levels are strictly convex. In chapter 2, we show that decentralized provision of public goods may be efficient if the center cares about regional welfare levels and views them as complements. The implied allocation is proportionally equitable. In chapter 3, we model transboundary externalities as correlated externalities and abatement technology as coarse. We demonstrate that decentralized control of acid rain may be efficient in the presence of correlated externalities and household attachment if the center views regional welfare levels as complements. When they are substitutes, the allocation is inefficient; it is efficient if externalities are not correlated in the sense that there is no regional pollution damage. In chapter 4, we examine non-cooperative provision of local public goods in an economy characterized by household attachment to regions. We assume that household psychic cost with the migration is a decreasing function of the number of migrants settled in the receiving country. We show that the subgame perfect equilibriums for the decentralized leadership in the presence of imperfectly mobile residents are socially inefficient while the decentralized leadership in the presence of perfectly mobile residents are socially efficient.