Fiscal decentralization : a political economy perspective

This paper surveys recent contributions to the study of fiscal decentralization which adopt a political economy approach. It is argued that this approach can capture, in a variety of formal models, the plausible and influential ideas (increasingly, supported by empirical evidence) that fiscal decentralization can lead to improved preference-matching and accountability of government. In particular, recent work on centralized provision of public good provision via bargaining in a legislature shows how centralization reduces preference-matching, and recent work using "electoral agency" models formalizes the accountability argument. These models also provide insights into when decentralization may fail to deliver these benefits

The solar influence on the probability of relatively cold UK winters in the future

Recent research has suggested that relatively cold UK winters are more common when solar activity is low (Lockwood et al 2010 Environ. Res. Lett. 5 024001). Solar activity during the current sunspot minimum has fallen to levels unknown since the start of the 20th century (Lockwood 2010 Proc. R. Soc. A 466 303–29) and records of past solar variations inferred from cosmogenic isotopes (Abreu et al 2008 Geophys. Res. Lett. 35 L20109) and geomagnetic activity data (Lockwood et al 2009 Astrophys. J. 700 937–44) suggest that the current grand solar maximum is coming to an end and hence that solar activity can be expected to continue to decline. Combining cosmogenic isotope data with the long record of temperatures measured in central England, we estimate how solar change could influence the probability in the future of further UK winters that are cold, relative to the hemispheric mean temperature, if all other factors remain constant. Global warming is taken into account only through the detrending using mean hemispheric temperatures. We show that some predictive skill may be obtained by including the solar effect

Transpolar voltage and polar cap flux during the substorm cycle and steady convection events

Transpolar voltages observed during traversals of the polar cap by the Defense Meteorological Satellite Program (DMSP) F-13 spacecraft during 2001 are analyzed using the expanding-contracting polar cap model of ionospheric convection. Each of the 10,216 passes is classified by its substorm phase or as a steady convection event (SCE) by inspection of the AE indices. For all phases, we detect a contribution to the transpolar voltage by reconnection in both the dayside magnetopause and in the crosstail current sheet. Detection of the IMF influence is 97% certain during quiet intervals and >99% certain during substorm/SCE growth phases but falls to 75% in substorm expansion phases: It is only 27% during SCEs. Detection of the influence of the nightside voltage is only 19% certain during growth phases, rising during expansion phases to a peak of 96% in recovery phases: During SCEs, it is >99%. The voltage during SCEs is dominated by the nightside, not the dayside, reconnection. On average, substorm expansion phases halt the growth phase rise in polar cap flux rather than reversing it. The main destruction of the excess open flux takes place during the 6- to 10-hour interval after the recovery phase (as seen in AE) and at a rate which is relatively independent of polar cap flux because the NENL has by then retreated to the far tail. The best estimate of the voltage associated with viscous-like transfer of closed field lines into the tail is around 10 kV

Was UV spectral solar irradiance lower during the recent low sunspot minimum?

A detailed analysis is presented of solar UV spectral irradiance for the period between May 2003 and August 2005, when data are available from both the Solar Ultraviolet pectral Irradiance Monitor (SUSIM) instrument (on board the pper Atmosphere Research Satellite (UARS) spacecraft) and the Solar Stellar Irradiance Comparison Experiment (SOLSTICE) instrument (on board the Solar Radiation and Climate Experiment (SORCE) satellite). The ultimate aim is to develop a data composite that can be used to accurately determine any differences between the “exceptional” solar minimum at the end of solar cycle 23 and the previous minimum at the end of solar cycle 22 without having to rely on proxy data to set the long‐term change. SUSIM data are studied because they are the only data available in the “SOLSTICE gap” between the end of available UARS SOLSTICE data and the start of the SORCE data. At any one wavelength the two data sets are considered too dissimilar to be combined into a meaningful composite if any one of three correlations does not exceed a threshold of 0.8. This criterion removes all wavelengths except those in a small range between 156 nm and 208 nm, the longer wavelengths of which influence ozone production and heating in the lower stratosphere. Eight different methods are employed to intercalibrate the two data sequences. All methods give smaller changes between the minima than are seen when the data are not adjusted; however, correcting the SUSIM data to allow for an exponentially decaying offset drift gives a composite that is largely consistent with the unadjusted data from the SOLSTICE instruments on both UARS and SORCE and in which the recent minimum is consistently lower in the wave band studied

Distributive Politics and the Benefits of Decentralization.

This paper integrates the distributive politics literature with the literature on decentralization by incorporating inter-regional project externalities into a standard model of distributive policy. A key finding is that the degree of uniformity (or "universalism") of the provision of regional projects is endogenous, and depends on the strength of the externality. The welfare benefits of decentralization, and the performance of "constitutional rules" (such as majority voting) which may be used to choose between decentralization and centralization, are then discussed in this framework.DECENTRALIZATION ; PUBLIC POLICY ; INCOME REDISTRIBUTION

Border controls and tax competition in a customs union

Foreign Trade;Fiscal Policy

A Note on the Hybrid Equilibrium in the Besley-Smart Model

This note shows that there is always a non-empty set of parameter values for which the hybrid equilibrium in the Besley and Smart(2003) model is unstable in the sense of Cho and Kreps. This set may include all the parameter values for which a hybrid equilibrium exists. For these parameter values, it is shown that a fully separating equilibrium always exists, which is Cho-Kreps stable. In this equilibrium, the good incumbent distorts ?scal policy to signal his type. An implication is that equilibrium in their model is not (generically) unique.

Voting, Lobbying, and the Decentralization Theorem

This paper revisits the fiscal "decentralization theorem", by relaxing the role of the assumption that governments are benevolent, while retaining the assumption of policy uniformity. If instead, decisions are made by direct majority voting, (i) centralization can welfare-dominate decentralization even if there are no externalities and regions are heterogenous ; (ii) decentralization can welfare-dominate centralization even if there are positive externalities and regions are homogenous. The intuition is that the insensitivity of majority voting to preference intensity interacts with the different inefficiencies in the two fiscal regimes to give second-best results. Similar results obtain when governments are benevolent, but subject to lobbying, because now decisions are too sensitive to the preferences of the organised group.Decentralization, majority voting, lobbying, local public goods.

Voting, Lobbying, and the Decentralization Theorem

This paper revisits the fiscal "decentralization theorem", by relaxing the role of the assumption that governments are benevolent, while retaining the assumption of policy uniformity. If instead, decisions are made by direct majority voting, (i) centralization can welfare-dominate decentralization even if there are no externalities and regions are heterogenous; (ii) decentralization can welfare-dominate centralization even if there are positive externalities and regions are homogenous. The intuition is that the insensitivity of majority voting to preference intensity interacts with the different inefficiencies in the two fiscal regimes to give second-best results. Similar results obtain when governments are benevolent, but subject to lobbying, because now decisions are too sensitive to the preferences of the organised group.decentralization, majority voting, lobbying, local public goods