Centralized and decentralized provision of public goods

We model the trade-off between centralized and decentralized decision making on the provision of local public goods. Decisions are influenced by spillover effects and differences in jurisdictional size. Centralized decisions are made in a legislature of locally elected representatives, and this creates a conflict of interest between citizens in different jurisdictions. The legislature can be self-interested or benevolent and this can result in either efficient, excessive, or misallocative provision of public goods. The form of centralized decision making has a significant influence on the incentives for centralizing decision making.