Voting on devolution in a federal country with a bicameral national system

We analyse voting on the devolution of the responsibilities for the provision of public goods to local governments in a federal country, with a bicameral national legislature. In our set-up, devolution means a constitutional fiscal reform which reduces federal public expenditure on a local public good, and simultaneously increases the transfers received by regions, via a tax-sharing mechanism. This allows the regions to provide a greater amount of a local public good which can compensate for the reduction of that provided upon a federal basis. We show under which conditions such a devolution reform is adopted or rejected.