The Political Economy of Policy Centralization: Direct Versus Representative Democracy

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  • University of Warwick


This paper analyzes policy centralization outcomes in a two-jurisdiction model of public good provision choices with heterogeneous policy preferences and interjurisdictional policy spillovers under two alternative political procedures, direct referendum and representative democracy. We show that policy centralization is more likely to occur if the choice to centralize is made by elected policymakers rather than by referendum. In these situations, centralized policies converge to the preferred level of the jurisdiction that least favours centralization, rather than to a compromise between the two jurisdictions' preferred levels.


Original languageEnglish
Pages (from-to)799-817
Number of pages19
JournalJournal of Public Economics
Issue number3-4
Publication statusPublished - Mar 2004


  • Centralization, Harmonization

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