Restriction to uniformity and political accountability

This paper discusses the fundamental hypothesis of policy uniformity under centralized decision making underlying Oates’ famous decentralization theorem. The theorem has come under pressure by the prediction that local public goods are provided to minimum winning coalitions rather than uniformly. The focus of this paper is on the impact of uniformity rules on political accountability. Using the concept of minimum winning coalitions, it is shown that the power of voters over politicians vanishes if election districts receive different levels of local public goods. However, setting up sufficiently strong uniformity rules, voters regain power. According to Oates’ theorem, uniformity is the main disadvantage of centralization, but according to the analysis undertaken in this paper centralization without uniformity would be even worse.