Journal Description Editorial Committee How to Subscribe Forthcoming Articles Staff Papers Archive Copyright Information Research at the IMF Free Email Notification Receive emails when we post new
items of interest to you. |
|
|
The Art of Making Everybody Happy: How to Prevent a Secession Michel Le Breton And Shlomo Weber Full Text of this Article (PDF 225K) Abstract: In this paper we examine
compensation schemes that prevent a threat of secession by any of a country's
regions. We prove that, under quite general assumptions on the distribution
of citizens' preferences, there exist transfer schemes that are secession-proof.
Moreover, we show that these compensation schemes entail a degree of partial
equalization among regions: the gap between advantaged regions and disadvantaged
regions has to be reduced but it should never be completely eliminated. We
demonstrate that in the case of a uniform distribution of the nation's citizens,
the secession-proof conditions generate the 50 percent compensation rule
for disadvantaged regions. |