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The Economic Research Institute, Stockholm School of Economics SSE/EFI Working Paper Series in Economics and Finance

No 173:
Distributional Conflict and Jurisdictional Organization

Karl Wärneryd ()

Abstract: The paper explores the implications for explaining the endogenous formation of jurisdictions of modelling the political process as a costly fight to acquire shares of the GNP pie. It is shown, in particular, that a system of federalism is especially significant in ameliorating distributional competition and conflict. Less resources are spent in aggregate on appropriative activities under a hierarchical system of federalism than in a unified jurisdiction with a single central government. Furthermore, if mobility is costless, then a form of federalism may be preferred by all agents even if it destroys resources.

Keywords: Federalism; contests; rent seeking; jurisdictions; centralization; (follow links to similar papers)

JEL-Codes: D72; H11; H73; (follow links to similar papers)

23 pages, May 1997

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This paper is published as:
Wärneryd, Karl, (1998), 'Distributional Conflict and Jurisdictional Organization', Journal of Public Economics, Vol. 69, September, No. 3, pages 435-450



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