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We analyze the implications of decentralization for the incentives of local governments to provide productivity enhancing local public goods and extort bribes from local entrepreneurs. We show that… (More)
We analyze the implications of fiscal decentralization for the size of the shadow economy, local government corruption, and the provision productivity enhancing local public goods. Most important, we… (More)
This classroom exercise illustrates the Tiebout (1956) hypothesis that residential sorting across multiple jurisdictions leads to a more efficient allocation of local public goods. The exercise… (More)