Local public good provision , municipal consolidation , and national transfers

  title={Local public good provision , municipal consolidation , and national transfers},
  author={Robert Dur and Klaas P. Staal},
We analyze a simple model of local public good provision in a country consisting of a large number of heterogeneous regions, each comprising two districts, a city and a village. When districts remain autonomous and local public goods have positive spillover effects on the neighboring district, there is underprovision of public goods in both the city and the village. When districts consolidate, underprovision persists in the village (and may even become more severe), whereas overprovision of… CONTINUE READING
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