Skip to main content Accessibility help
×
Home
Hostname: page-component-99c86f546-4k54s Total loading time: 0.216 Render date: 2021-12-01T00:38:05.375Z Has data issue: true Feature Flags: { "shouldUseShareProductTool": true, "shouldUseHypothesis": true, "isUnsiloEnabled": true, "metricsAbstractViews": false, "figures": true, "newCiteModal": false, "newCitedByModal": true, "newEcommerce": true, "newUsageEvents": true }

3 - SOVEREIGNTY AND COMMITMENT

Published online by Cambridge University Press:  14 January 2010

Jonathan A. Rodden
Affiliation:
Massachusetts Institute of Technology
Get access

Summary

This depends on principles of human nature, that are as infallible as any mathematical calculations. States will contribute or not, according to their circumstances and interests: They will all be inclined to throw off the burthens of government upon their neighbors.

Alexander Hamilton, Speech in the New York Ratifying Convention, 1788

The previous chapter argued that in order to bring the theory literature closer to evolving empirical realities around the world, the old notion of decentralization as a clean division of sovereignty among vertically arranged governments must be replaced by an approach that highlights the murkiness and contestability of sovereignty in a world with opportunistic, politically motivated actors. The previous chapter also reviewed some rather attractive and time-honored arguments linking decentralization, federalism, and fiscal discipline, but then examined cross-country data suggesting that modern forms of decentralization and federalism seem inconsistent with their basic assumptions.

In order to pave the way for an explanation of the wide range of experiences related to decentralization, federalism, and fiscal discipline around the world, this chapter takes a political economy approach to the issue of sovereignty over debt in multitiered systems. It presents a dynamic game of incomplete information played between higher and lower-level governments, each of which has incentives to see that the other government undertakes painful adjustment to negative income shocks. A key lesson is that when sovereignty is unclear or disputed, actors use the information available to them and assign probabilities to the likely ultimate locus of authority in the event of a conflict.

Type
Chapter
Information
Hamilton's Paradox
The Promise and Peril of Fiscal Federalism
, pp. 48 - 74
Publisher: Cambridge University Press
Print publication year: 2005

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Send book to Kindle

To send this book to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle.

Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Send book to Dropbox

To send content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about sending content to Dropbox.

Available formats
×

Send book to Google Drive

To send content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about sending content to Google Drive.

Available formats
×