- Universitat Autonoma de Barcelona
mercoledì 22 gennaio 2020
Polo Santa Marta, Via Cantarane 24, Sala Vaona
This paper studies the stability of a multi-level government. We analyze an extensive form game played between two politicians leading two levels of government. We characterize the conditions that render such government structures stable. We show that if leaders care about electoral rents and the preferences of the constituencies at different levels are misaligned, then the decentralized government structure may be unsustainable. This result is puzzling because, from a normative perspective, the optimality of decentralized decisions via a multi-level government structure is relevant precisely when different territorial constituencies exhibit preference heterogeneity. The application to the current conflict between Catalonia and Spain is specially relevant.