If you need an accessible version of this item please contact JSTOR User Support

The Role of Market Size in the Formation of Jurisdictions

Alessandra Casella
The Review of Economic Studies
Vol. 68, No. 1 (Jan., 2001), pp. 83-108
Published by: Oxford University Press
Stable URL: http://www.jstor.org/stable/2695920
Page Count: 26
  • Download PDF
  • Cite this Item

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If you need an accessible version of this item please contact JSTOR User Support
The Role of Market Size in the Formation of Jurisdictions
Preview not available

Abstract

Administrative and political reorganization is being actively debated even in the mature, stable economies of Western Europe. This paper investigates the possibility that such a reorganization is tied to the integration of economic markets. The paper describes a model where heterogeneous individuals form coalitions for the provision of a public good and shows that the number and composition of these jurisdictions depend on the overall size of the market. The range of economic activities engaged in by jurisdiction members increases when the size of the market increases, and so does the range of their preferences over the public good. The result is a change in the endogenous borders of the jurisdictions, and a reorganization of all coalitions. The optimal number of jurisdictions is unique and increases with market size. In the absence of compensating transfers, however, the decentralized equilibrium need not be optimal and is not unique, although there is no restriction on individuals' ability to coordinate the formation of coalitions. It remains true that a large enough increase in market size will trigger an increase in the number of jurisdictions.

Page Thumbnails

  • Thumbnail: Page 
83
    83
  • Thumbnail: Page 
84
    84
  • Thumbnail: Page 
85
    85
  • Thumbnail: Page 
86
    86
  • Thumbnail: Page 
87
    87
  • Thumbnail: Page 
88
    88
  • Thumbnail: Page 
89
    89
  • Thumbnail: Page 
90
    90
  • Thumbnail: Page 
91
    91
  • Thumbnail: Page 
92
    92
  • Thumbnail: Page 
93
    93
  • Thumbnail: Page 
94
    94
  • Thumbnail: Page 
95
    95
  • Thumbnail: Page 
96
    96
  • Thumbnail: Page 
97
    97
  • Thumbnail: Page 
98
    98
  • Thumbnail: Page 
99
    99
  • Thumbnail: Page 
100
    100
  • Thumbnail: Page 
101
    101
  • Thumbnail: Page 
102
    102
  • Thumbnail: Page 
103
    103
  • Thumbnail: Page 
104
    104
  • Thumbnail: Page 
105
    105
  • Thumbnail: Page 
106
    106
  • Thumbnail: Page 
107
    107
  • Thumbnail: Page 
108
    108