Enlargement versus Deepening: The Trade-off Facing Economic Unions

This paper analyzes the relationship between the size of an economic union and the degree of policy centralization. We consider a political economy setting in which elected representatives bargain about the degree of centralization within the union. In our model strategic delegation affects the identity of the representatives and hence the equilibrium policy outcome. We show that the relationship between the size of the union and centralization may be non-monotonic: Up to a certain size of the union enlargement leads to deeper integration,whereas beyond that size further enlargement implies less centralization. We also show that freezing the level of centralization or allowing an associated membership can mitigate the trade-off.fiscal federalism, policy centralization, political economy

Fiscal centralization and the political process

We study the dynamic support for fiscal decentralization in a political agency model from the perspective of a region. We show that corruption opportunities are lower under centralization at each period of time. However, centralization makes more difficult for citizens to detect corrupt incumbents. Thus, corruption is easier under centralization for low levels of political competition. We show that the relative advantage of centralization depends negatively on the quality of the local political class, but it is greater if the center and the region are subject to similar government productivity shocks. When we endogenize the quality of local politicians, we establish a positive link between the development of the private sector and the support for decentralization. Since political support to centralization evolves over time, driven either by economic/political development or by exogenous changes in preferences over public good consumption, it is possible that voters are (rationally) discontent about it. Also, preferences of voters and the politicians about centralization can diverge when political competition is weak.Decentralization, Centralization, Political agency, Quality of politicians, Corruption

Meeting Real-Time Constraint of Spectrum Management in TV Black-Space Access

The TV set feedback feature standardized in the next generation TV system, ATSC 3.0, would enable opportunistic access of active TV channels in future Cognitive Radio Networks. This new dynamic spectrum access approach is named as black-space access, as it is complementary of current TV white space, which stands for inactive TV channels. TV black-space access can significantly increase the available spectrum of Cognitive Radio Networks in populated urban markets, where spectrum shortage is most severe while TV whitespace is very limited. However, to enable TV black-space access, secondary user has to evacuate a TV channel in a timely manner when TV user comes in. Such strict real-time constraint is an unique challenge of spectrum management infrastructure of Cognitive Radio Networks. In this paper, the real-time performance of spectrum management with regard to the degree of centralization of infrastructure is modeled and tested. Based on collected empirical network latency and database response time, we analyze the average evacuation time under four structures of spectrum management infrastructure: fully distribution, city-wide centralization, national-wide centralization, and semi-national centralization. The results show that national wide centralization may not meet the real-time requirement, while semi-national centralization that use multiple co-located independent spectrum manager can achieve real-time performance while keep most of the operational advantage of fully centralized structure.Comment: 9 pages, 7 figures, Technical Repor

Fiscal Federalism and Electoral Accountability

We study the efficient allocation of spending and taxation authority in a federation in which federal politicians are exposed to electoral uncertainty. We show that centralization may, but need not, result in a loss of electoral accountability. We identify an important asymmetry between positive and negative externalities and show that centralization may not be efficient in economies with positive externalities even when regions are identical and centralization does not entail a loss of accountability. We also show that decentralization can only Pareto dominate centralization in economies with negative externalities.fiscal federalism, local public goods, externalities, performance voting, turnout uncertainty, electoral accountability

Enlargement versus deepening: the trade-off facing economic unions.

This paper analyzes the relationship between the size of an economic union and the degree of policy centralization. We consider a political economy setting in which elected representatives bargain over the degree of centralization within the union. In our model strategic delegation affects the identity of the representatives and hence the equilibrium policy outcome. We show that the relationship between the size of the union and centralization may be non-monotonic: Up to a certain size enlargement leads to deeper integration, whereas beyond that size further enlargement implies less centralization. We also show that freezing the level of centralization and associate memberships can mitigate the trade-off.

Centralization Trade-off with Non-Uniform Taxation

When local public goods are provided by a centralized authority, spillovers are internalized, but heterogeneity in preferences may be suppressed. Besley and Coate (2003) recently examined this classic trade-off for a uniform tax regime with strategic delegation. Here, we extend their approach by allowing for a non-uniform tax regime. We find that centralization with nonuniform taxation unambiguously increases welfare in comparison to uniform-tax centralization. With non-cooperative legislators coming from symmetric districts, our centralization dominates decentralization for any degree of spillovers. In other cases, non-uniform taxation at least improves the odds of centralization, if measured by a utilitarian yardstick.decentralization, taxation, local public goods

CENTRALIZATION AND DECENTRALIZATION IN EDUCATION SYSTEM: ADVANTAGES AND DISADVANTAGES

In the concept of management system, centralization and decentralization are important concepts for the public to consider as they have significant effects on the running of schools in educating children as the nation’s assets. Both concepts are related to the decision makings and the holding of authorities in the management system. Centralization and decentralization have been implemented in many countries in different regions worldwide for many years. They have their own characteristics, advantages and disadvantages which are distinctive from one to another. This paper aims to describe the basic concept of centralization and decentralization in education system and their advantages and disadvantages from a broad point of view

Unionization Structures and Firms' Incentives for Productivity Enhancing Investments

This paper examines how unionization structures that differ in the degree of wage centralization affect firms' incentives to increase labor productivity. We distinguish three modes of unionization with increasing degree of centralization: (1) "Decentralization" where wages are determined independently at the firm-level, (2) "coordination" where an industry union sets individual wages for all firms at the firmlevel, and (3) "centralization" where a uniform wage rate is set for the entire industry. We show that firms' investment incentives are largest under complete centralization. However, investment incentives are non-monotone in the degree of centralization so that "decentralization" carries higher investment incentives than "coordination." Depending on the innovation outcome, workers' wage bill is maximized under "centralization" if firms' productivity differences remain small. Otherwise, workers prefer an intermediate degree of centralization, which holds innovative activity down at its lowest level. Labor market policy can spur innovation by either decentralizing unionization structures or by imposing non-discrimination rules on monopoly unions. ZUSAMMENFASSUNG - (Gewerkschaftssysteme und die Anreize der Unternehmen zur Produktivitätssteigerung) Diese Arbeit untersucht den Einfluß unterschiedlicher Gewerkschaftssysteme auf die Anreize von Unternehmen, ihre Arbeitsproduktivität zu erhöhen. Wir unterscheiden zwischen drei Gewerkschaftsstrukturen mit zunehmendem Zentralisierungsgrad: 1.) "Dezentrale Lohnsetzung", bei der Löhne ohne zentrale Koordination auf Unternehmensebene bestimmt werden, 2.) "koordinierte Lohnsetzung", bei der eine Industriegewerkschaft die Lohnforderungen gegenüber einzelnen Arbeitgebern koordiniert und 3.) "zentralisierte Lohnsetzung", bei der ein einheitlicher Lohnsatz für die gesamte Industrie bestimmt wird. Wir zeigen, daß die Investitionsanreize der Unternehmen bei "zentralisierter Lohnsetzung" am stärksten sind. Die Investitionsanreize sind allerdings nicht monoton im Zentralisierungsgrad: "Dezentralisierte Lohnsetzung" führt zu stärkeren Investitionsanreizen als "koordinierte Lohnsetzung". Die Lohnsumme ist in einem zentralisierten Gewerkschaftssystem maximal, solange die Innovationen hinreichend "klein" sind, so daß die Unterschiede in der Produktivität zwischen den Unternehmen gering bleiben. Bei "großen" Innovationen bevorzugen Arbeitnehmer hingegen eine "koordinierte Lohnsetzung", wodurch die Innovationstätigkeit der Unternehmen auf ihr niedrigstes Niveau gedrückt wird. Arbeitsmarktpolitik kann die Innovationsanreize entweder durch eine Dezentralisierung der Lohnsetzung oder durch Diskriminierungsverbote für Monopolgewerkschaften erhöhen.Unions, Oligopoly, Innovation, Productivity, Wage-Setting Centralization, Labor Market Flexibility