Political and Economic Theories of Federalism

M. Govinda Rao and Nirvikar Singh

in The Political Economy of Federalism in India

Published in print November 2006 | ISBN: 9780195686937
Published online October 2012 | e-ISBN: 9780199080571 | DOI:

Series: Oxford India Paperbacks

Political and Economic Theories of Federalism

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This chapter reviews economic and political theories of federalism. It explains that the political theories see federalism as a bargain among constituent units of the federation to preserve group identities while ensuring security and stability. On the other hand, economic theories emphasize the efficiency and equity impacts on resource allocation, for private as well as public goods and services. It highlights two aspects government behaviour in a federal system: first, one cannot assume that different governments in a federation will automatically cooperate and, second, the government at all levels is composed of self-interested individuals.

Keywords: federalism; economic theories; political theories; government revenue; representation; group identities; security; stability; resource allocation; public goods; public services

Chapter.  12414 words. 

Subjects: Economic Development and Growth

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