Federalism and the Market

Intergovernmental Conflict and Economic Reform in the Developing World

Bibliographic Data

ID7344587
AuthorsTulia Gabriela Falleti (0000-0002-0995-4682, University of Pennsylvania, corresponding author)
Year2006
Volume4
Issue2
Pages414-415
Publication date2006-05-18
Open AccessYes
TypeARTICLE
VenuePerspectives on Politics (JOURNAL)
Journal identifiersISSN: 1537-5927 • E-ISSN: 1541-0986
PublisherCambridge University Press (CUP) (PUBLISHER)
DOI10.1017/s1537592706600273
OpenAlexW2123283233
LanguageEN
Citations received14

Federalism and the Market: Intergovernmental Conflict and Economic Reform in the Developing World. By Erik Wibbels. New York: Cambridge University Press, 2005. 276p. $85.00. In this book, Erik Wibbels explores the “federal collective action problem” (pp. 47, 62). Because in federal countries national and regional leaders answer to different constituencies, their electoral interests and preferences toward socially costly reforms might conflict. Market economic reforms constitute one type of such measures. As Wibbels argues, in crisis-ridden federations, “economic reforms takes [ sic ] on the quality of a public good requiring the individual regions to cooperate, whereas it is more rational for each career-oriented politician to avoid the costs associated with austerity” (p. 27). National leaders concerned with macroeconomic stability want market economic reforms implemented in the regions, but regional leaders have an incentive to free-ride and adopt fiscally expansionary policies. The book suggests that “many market reform policies are a function of a constant process of bargaining between national and regional leaders struggling for political survival” (p. 5). Moreover, it argues that “[t]he degree to which the two sets of actors [national and regional leaders] conflict depends on four crucial factors: the electoral interests that each brings to the game, a shared intergovernmental fiscal system, the manner in which regional interests are represented in national policy making, and the levers of partisan influence national leaders have over subnational politicians” (pp. 5–6). The author proposes that fiscally autonomous regions with competitive party systems are more likely to converge with the national government's interests on market economic reforms; and that national electoral coattails are a more effective means for disciplining regional leaders than partisan harmony through centrally dispensed carrots and sticks (pp. 38–39

Austerity · Decentralization · Economics · Federalism · fiscal federalism · Government (linguistics · Incentive · Market economy · Political economy · Political science · Politics · Fiscal Policy and Economic Growth · Public Administration

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