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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. |
