Abstract
AbstractIt is not clear, a priori, whether a centralized or decentralized institutional arrangement is better at providing public goods. This study investigates how decentralization of regulatory authority affects public good provision, focusing on food safety. Using a natural experiment that transfers food safety regulatory authority over the food processing and manufacturing sector from provincial to city‐level governments, we find a 51% decrease in the average number of food safety incidents within cities that experienced the decentralization reform. Decentralization reduces food safety incidents by rectifying information asymmetry in food safety regulations and by increasing local food safety laws and regulations. Additional analyses show that decentralization primarily improves the food safety of larger and more experienced firms, and it has not harmed the total revenue of large‐scale food processing and manufacturing firms. Our study demonstrates the importance of information available to regulatory authorities in food safety regulation and highlights the role of local information in the decentralized provision of public goods.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
