SAND-ZANTMAN Wilfried, LAFFONT Jean-Jacques
In this paper, we investigate the relevance of decentralizing public good decision-making from a political and informational perspective. First, we explain why different levels of jurisdiction (central and local) are likely to take their decisions under different informational structures. We derive the incentives of both potential decision-makers to look for the relevant pieces of information. Then, we identify two majors trade-offs in the constitutional debate. We show that the choice between centralization and decentralization can be seen either as a choice between better information and political distortions, or as a choice between better information and internalization of external effects.
LAFFONT, J.J. et SAND-ZANTMAN, W. (2002). Information acquisition, political game and the delegation of authority. European Journal of Political Economy, 18(3), pp. 407-428.