Arbeitspapier
Size and Soft Budget Constraints
There is much evidence against the so-called "too big to fail" hypothesis in the case of bailouts to sub-national governments. We look at a model where districts of different size provide local public goods with positive spillovers. Matching grants of a central government can induce socially-efficient provision, but districts can still exploit the intervening central government by inducing direct financing. We show that the ability of a district to induce a bailout from the central government and district size are negatively correlated.
- Language
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Englisch
- Bibliographic citation
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Series: Bonn Econ Discussion Papers ; No. 18/2006
- Classification
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Wirtschaft
- Subject
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bailouts
soft-budget constraints
jurisdictional size
public goods
spillovers
- Event
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Geistige Schöpfung
- (who)
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Crivelli, Ernesto
Staal, Klaas
- Event
-
Veröffentlichung
- (who)
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University of Bonn, Bonn Graduate School of Economics (BGSE)
- (where)
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Bonn
- (when)
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2006
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Crivelli, Ernesto
- Staal, Klaas
- University of Bonn, Bonn Graduate School of Economics (BGSE)
Time of origin
- 2006
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