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The segregative properties of endogenous formation of jurisdictions with a welfarist central government
Authors:Rongili Biswas  Nicolas Gravel  Rémy Oddou
Affiliation:1. Maulana Azad College, Kolkata, India
2. Department of Public Policy and Public Choice (POLIS), University of Eastern Piedmont, Alessandria, Italy
3. Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS, Centre de la Vieille Charité, 2, rue de la Charité, 13 002, Marseille, France
4. THEMA, Université de Cergy-Pontoise, 33, Boul. du Port, 95 300, Cergy-Pontoise Cedex, France
Abstract:This paper examines the segregative properties of Tiebout-type process of jurisdiction formation by freely mobile households in the presence of a central government which makes equalization transfers across jurisdictions so as to maximize a generalized utilitarian or a max–min objective. It is shown that the introduction of such a central government significantly affects the set of stable jurisdiction structures. It is also shown that the class of households additively separable preferences that guarantees the wealth segregation of any stable jurisdiction structure is unaffected by the presence of a central government if this government uses a generalized utilitarian objective.
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