Fiscal Federalism and Lobbying
|Speaker:||Umberto Galmarini, University of Milan|
|Date:||Friday 26 October 2007|
|Location:||Lecture Room D, Streatham Court|
Which government functions should be decentralized (resp. centralized) once lobbying behavior is taken into account? We find that the answer largely depends on how the interests of the regional lobbies are positioned with respect to the function to be decentralized (resp. centralized). When regional lobbies have conflicting interests, then lobbying is less damaging for social welfare under centralization. On the contrary, when regional lobbies have aligned interests, then lobbying is less damaging for social welfare under decentralization, provided that policy spillovers on the non-organized groups are not too strong.