Är själv bäste dräng
KommunerSpelteoriExternaliteterKlubbteoriEconomicsEconometricsEconomic theoryEconomic systemsEconomic policyNationalekonomiEkonometriEkonomisk teoriEkonomiska systemEkonomisk politikBusiness and Economics
In part this paper is a contribution to the ongoing Swedish discussion about our public structures. The discussion has picked up speed in the last years thanks to a government backed committee trying to come up with a suggestion to make our public sector more efficient. A big part of the debate is about the independence and work of our municipalities, what they should do, what they shouldn?t do and when the state should step in and take over. I make a theoretical investigation into one of these issues, the one about job creation. Should the municipalities them self take job creation or not? Based on the theories of externalities, games and clubs I make the argument that it?s inefficient to let the municipalities deal with job creation. They affect each other in such a way that a problem with free riding becomes acute. They all have more to gain and less to loose by not acting and hoping that someone pulls their weight and then simply take a part of the cake. Hence no one does anything. My conclusion is that the municipalities are too small and open to be an effective institution for job creation. It?s better to late the state take care of this problem, if indeed any government agency should. Since I base my arguments solely on theory the paper can also be read as a road map on how to treat issues of this kind.