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Economics Research International
Volume 2012 (2012), Article ID 409135, 7 pages
http://dx.doi.org/10.1155/2012/409135
Review Article

Political Failures and Intergovernmental Competition

CORE, Université Catholique de Louvain, 34 Voie du Roman Pays, 1348 Louvain-la-Neuve, Belgium

Received 22 March 2012; Accepted 28 June 2012

Academic Editor: Junsen Zhang

Copyright © 2012 Jean Hindriks. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

In normative public economics, intergovernmental competition is usually viewed as harmful. Although empirical support for this position does not abound, market integration has intensified competition among developed countries. In this paper we argue that when assessing welfare effects of intergovernmental competition for various forms of political failures (the public choice critique), the outcome is ambiguous and competition can be welfare improving.