|Abstract||The decision to allocate policy jurisdictions to different levels of government is related to a number of trade-offs between the advantages and disadvantages of centralized versus decentralized provision of public services. A trade-off central to many discussions is that between the internalization of externalities under centralization versus an accountability advantage of decentralization. In this paper we formalize this trade-off in the context of a class of principal agent models known as common agency.|
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