Arbeitspapier

Local Policy Choice: Theory and Empirics

This paper critically surveys the growing literature on the policy choices of local governments. First, we identify various reasons for local government policy interactions, including fiscal competition, bidding for firms, yardstick competition, expenditure spillovers, and Tiebout sorting. We discuss theoretically what parameters should be estimated to determine the reason for competition among local governments. We emphasize how the policy outcomes emerging from this competition are affected by the presence of constraints imposed by higher-level governments. Second, we integrate theoretical and empirical analyses on the effects of fiscal decentralization on mobility, spillovers, fiscal externalities, economic outcomes, and distributional issues. Third, we identify key issues that arise in the empirical estimation of strategic interactions among local governments and highlight recent quasi-experimental evidence that has attempted to identify the mechanism at work. Finally, a synthesis model, containing multiple mechanisms and fiscal instruments, resolves some puzzles and provides guidance for future research.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 8647

Klassifikation
Wirtschaft
Taxation, Subsidies, and Revenue: General
Publicly Provided Goods: General
State and Local Government; Intergovernmental Relations: General
Regional Government Analysis: General
Thema
fiscal competition
yardstick competition
spillovers
strategic policy
interdependence
reaction functions
local public finance

Ereignis
Geistige Schöpfung
(wer)
Agrawal, David R.
Hoyt, William H.
Wilson, John D.
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and Ifo Institute (CESifo)
(wo)
Munich
(wann)
2020

Handle
Letzte Aktualisierung
10.03.2025, 11:45 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Agrawal, David R.
  • Hoyt, William H.
  • Wilson, John D.
  • Center for Economic Studies and Ifo Institute (CESifo)

Entstanden

  • 2020

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