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Zviad Barkaia Public Choice Paper
Zviad Barkaia Public Choice Paper
2015
Introduction
Zviad Barkaia
1 Tiebout C. M. (Oct. 1956) A Pure Theory of Local Expenditures The Journal of Political
Economy, Vol. 64, No. 5, (Oct., 1956), pp. 416-424. The University of Chicago Press
Zviad Barkaia
central
government
and
nation
state
follows
local
government and local centers of political power. Local tribes, clans, feudal
benefices were controlled not by central governors but by local leaders. As
an example, we can concentrate on the history of political evolution of
Europe and North America. For example in the Nordic countries, where the
Danish King had only ceremonial power on Denmark, Norway, and Sweden,
local rulers reinforced and adopted most function of state because of the
absence of central power. Even now, despite the fact that the central
governments in the Scandinavian countries have wide regulatory and
functional abilities, local government still is presented as a strong part of
political decision-making process.3 The power of local governments clearly
appears in Switzerland, where cantons presently have a huge political and
economical power. They are local planners, and they perform essential
political tasks: social welfare, local defense, local taxation, etc. 4
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Zviad Barkaia
3%
37%
Federal Government
34%
Local Governments
Lnder
26%
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Zviad Barkaia
Specific-Purpose Grants
9%
General-Purpose Grants
6%
Shared taxes
63%
Other Revenue
As you can see from the figure #2, only 9% of revenue comes from
exclusive taxes. Therefore, we can easily assume that local level is largely
depentens on higher-level government.
The Chinese model is further away from decentralization. Chinese
provincial and local government practically are integrated with central one;
the most popular phrase in the description of the local administrative system
of china is directly under the Central Government; The provinces and
autonomous regions are direct parts of central government.6
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New Application
To test theoretically Tiebouts pure theory of local expenditures, I am
trying to apply this model to the Soviet Union. (Of course my goal is not fully
explain the political circumstance in Post-Soviet countries. This paper will be
not sufficient for this aim. I am just trying to substitute Tiboutes model to
the different circumstance and show how hard is to generalize it.) Let us
assume that the Post-Soviet countries are local governments (In the Soviet
era Post-Soviet national governments were assumed as a local government.)
and assume that they are agents that should provide goods and prices for
those goods. If we apply the theory of local expenditure on this area
according to Tiebout we should assume that all countries have time and
place knowledge (as Tiebout assumed about local governments) and all
countries are more or less able to provide public goods.
However, after collapse of the Soviet Union reality was different.
Because of centralized political system during of USSR, like in Germany or
China
and
because
of
nonexistence
of
practical
knowledge,
local
governments were motionless. After the collapse of the Soviet Union, new
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Zviad Barkaia
Conclusion
In this paper I have argued that local government has knowledge of provision
of goods only in the countries where exists socio-political tradition of strong
local government. Without this tradition, it is less expected for a pure theory
of local expenditures to be plausible.
On the example of the Soviet Union, we can see that after collapse of central
government local states could not rearrange a political system for a long
time.
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Zviad Barkaia
Bibliography:
Hayek, Friedrich A. (1945) "The Use of Knowledge in Society", American
Economic Review. XXXV, No. 4. pp. 519-30. American Economic Association;
Local Government Administration in Germany http://www.iuscomp.org/gla/literature/localgov.htm
Political System and Government Switzerland's Constitution and Federalism
http://swiss-government-politics.all-about-switzerland.info/index.html
Shahs A. (2006) Local Governance in Developing Countries; Washington D.C.
The World Bank.
The Local Administrative System
http://www.china.org.cn/english/Political/28842.htm
Tiebout C. M. (Oct. 1956) A Pure Theory of Local Expenditures The Journal of
Political Economy, Vol. 64, No. 5, (Oct., 1956), pp. 416-424. The University of
Chicago Press
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