Public Finance, 4th Edition

Chapter 26: Optimal Federalism

Sorting the Functions of Government Within the Fiscal Hierarchy

1. The Potential for Incompatibilities and Destructive Competition 
   1. The Two Fundamental Sorting Questions of Fiscal Federalism 
   2. Social Welfare Within Fiscal Federalism 
2. Sorting the Functions of Government Within the Fiscal Hierarchy 
   1. Stigler’s Prescription for Optimal Federalism 
   2. Oates’ Perfect Correspondence 
   3. Oates’ Decentralization Theorem 
   4. Misperceived Preferences 
   5. Local Autonomy in a First-Best Environment? 
3. Optimal Federalism and the Distribution Function 
   1. Redistribution, the Competition Problem, and Potential Incompatibilities 
   2. Criticisms of the Prevailing Model 
   3. Decreasing-Cost Services 
   4. Politics and the Social ...