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Local public good provision, municipal consolidation, and national transfers
Erasmus Univ, Rotterdam, Netherlands.
University of Bonn, Germany. (Nationalekonomi)ORCID iD: 0000-0003-3719-8594
2008 (English)In: Regional Science and Urban Economics, ISSN 0166-0462, E-ISSN 1879-2308, Vol. 38, no 2, p. 160-173Article in journal (Refereed) Published
Abstract [en]

We analyze a simple model of local public good provision in a region comprising two districts, a city and a village. When districts remain autonomous and local public goods have positive spillover effects on the neighboring district, there is underprovision of public goods in both the city and the village. When districts consolidate, underprovision persists in the village (and may become even more severe), whereas overprovision of public goods arises in the city as urbanites use their political power to exploit the villagers. From a social welfare point of view, inhabitants of the village have insufficient incentives to vote for consolidation. We examine how national transfers to local governments can resolve these problems.

Place, publisher, year, edition, pages
Amsterdam: Elsevier, 2008. Vol. 38, no 2, p. 160-173
Keyword [en]
Local public goods; Municipal consolidation; Voting; Intergovernmental transfers; Tax discrimination
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:kau:diva-45621DOI: 10.1016/j.regsciurbeco.2008.01.005ISI: 000256554100005OAI: oai:DiVA.org:kau-45621DiVA, id: diva2:957339
Available from: 2016-09-01 Created: 2016-09-01 Last updated: 2017-11-21Bibliographically approved

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Citation style
  • apa
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  • de-DE
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  • nn-NB
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  • Other locale
More languages
Output format
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  • text
  • asciidoc
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