A theoretical model of a multi-level government
The model of this chapter explicitly distinguishes between several decisionmaking levels within the government sector. Each level has its own policy makers and policy instruments. Furthermore, account is taken of the interaction between decisionmaking processes at different levels;
More categories of government provided goods are distinguished. However, all transfer payments, except for a few income maintenance programs, are excluded from the model1);
Multiple positions and mobility — transition — do no longer play an explicit role in the preference formation of an individual. This assumption is made in order to keep the model tractable. Note that, due to the exclusion of most of the transfer payments, this is perhaps not a very restrictive assumption as it is expected that the transition weights especially play an important role in the explanation of the provision of transfer payments (cf. Chapter 6, Section 6.2).
KeywordsLocal Government Social Group Central Government Budget Constraint Policy Instrument
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