期刊名称：CORE Discussion Papers / Center for Operations Research and Econometrics (UCL), Louvain
出版年度：2002
卷号：2002
出版社：Center for Operations Research and Econometrics (UCL), Louvain
摘要：We consider a political economy model of country whose citizens have heteroge-
neous preferences for a national policy and some regions may contemplate a threat
of secession. The country is eÆcient if its break-up into smaller countries leads to
aggregate utility loss. We show that in an eÆcient country whose citizens' preferences
exhibit a high degree of polarization, a threat of secession cannot be eliminated without
inter-regional transfers. We also demonstrate that, if majority voting is used to deter-
mine the redistribution schemes within the country, then a high degree of polarization
yields the full compensation scheme as the unique political equilibrium.
