The thesis consists of three essays. In the first essay, the role of party politics in provision of public goods within a federal economy is analyzed. The public goods, which have inter-jurisdictional spillover effect, are locally produced with federal transfers and local revenues. The federal government can not commit to the level of transfers. The direction and magnitude of federal fund flows are influenced by local revenues as well as the re-election probability of the parties in power at the federal and provincial levels. Under such a scenario, politically motivated grants alter the incentive for raising local revenues. If votes swing heavily in favor of either the incumbent or the challenger in the provincial elections and/or if the coefficients for absolute prudence from the utility of public good are low enough, then grants are designed in such a way that the incentive for increasing revenues is lower in the province where the party identity is similar with the federal government. If these conditions are not met, such incentive is higher in the politically favorite regime. This result is generalized over different combinations of ruling parties in different seats of government. / In the second essay, the issue of dynamic public good provision within a federation is analyzed. Provinces lobby for more federal funds to produce a pure, dynamic public good such as an improvement in environmental quality. Allocation of federal funds is dictated by the level of lobbying. Consumers' welfare equals utility from the public good, net of lobbying cost. For symmetric provinces, the steady state lobbying level and stock of public good may be greater in the case when lobbyists are non-benevolent and captures a part of the federal grant as private rent. Second, with a rent-appropriating lobbyist, the welfare of the consumers may be higher under non-cooperative lobbying protocol. In case of asymmetric provinces, welfare may 'flow' from the less efficient province to the more efficient province, violating equalization principle within a federation. / In the third essay, the disciplinary role of elections is discussed. The incumbent politician in a province, with locally procured taxes, provides a local public good and appropriates some private rent. The incumbent's reputation decreases with the amount of rent. Voters may judge the performance of the incumbent in two ways: either his absolute performance matters or his performance is compared with that of the neighboring provinces' incumbent through yardstick competition. In a static setting, the unitary evaluation fares better than relative evaluation in restraining the politician. However, in a dynamic setting, when the stock of reputation increases through time, a relative evaluation imposes higher discipline on incumbent politician.
| Identifer | oai:union.ndltd.org:LACETR/oai:collectionscanada.gc.ca:QMM.115649 |
| Date | January 2007 |
| Creators | Sengupta, Bodhisattva. |
| Publisher | McGill University |
| Source Sets | Library and Archives Canada ETDs Repository / Centre d'archives des thèses électroniques de Bibliothèque et Archives Canada |
| Language | English |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Format | application/pdf |
| Coverage | Doctor of Philosophy (Department of Economics.) |
| Rights | All items in eScholarship@McGill are protected by copyright with all rights reserved unless otherwise indicated. |
| Relation | alephsysno: 002840539, proquestno: AAINR66703, Theses scanned by UMI/ProQuest. |
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