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Evidence Of Political Yardstick Competition In France Using A Two-Regime Spatial Durbin Model With Fixed Effects

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  • J. Paul Elhorst
  • Sandy Fréret

Abstract

This research proposes a two-regime spatial Durbin model with spatial and time-period fixed effects to test for political yardstick competition and exclude any other explanation that might produce spatial interaction effects among the dependent variable, the independent variables, or the error term. The study also derives the maximum likelihood estimator and variance-covariance matrix of the parameters of this model. Data pertaining to welfare spending by 93 departments in France during 1992-2000 provide significant empirical evidence in support of political yardstick competition. Departments governed by a small political majority mimic neighboring expenditures on welfare to a greater extent than do departments governed by a large political majority. Copyright (c) 2009, Wiley Periodicals, Inc.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Journal of Regional Science.

Volume (Year): 49 (2009)
Issue (Month): 5 ()
Pages: 931-951

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Handle: RePEc:bla:jregsc:v:49:y:2009:i:5:p:931-951

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-4146

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Cited by:
  1. Pierre Salmon, 2013. "How significant is yardstick competition among governments? Three reasons to dig deeper," Working Papers hal-00830872, HAL.
  2. Vincenzo Atella & Federico Belotti & Domenico Depalo & Andrea Piano Mortari, 2014. ": Measuring spatial effects in presence of institutional constraints: the case of Italian Local Health Authority expenditure," Temi di discussione (Economic working papers) 967, Bank of Italy, Economic Research and International Relations Area.
  3. Laurent Van Malderen & Bart Jourquin & Isabelle Thomas, 2012. "Employers Transport Plans: Do They Change The Commuting Behaviour Of Workers?," ERSA conference papers ersa12p1048, European Regional Science Association.
  4. Maura Francese & Massimiliano Piacenza & Marzia Romanelli & Gilberto Turati, 2012. "Understanding Inappropriateness in Health Care. The Role of Supply Structure, Pricing Policies and Political Institutions in Caesarean Deliveries," Working papers 001, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
  5. Toni Mora & Rosina Moreno, 2010. "Specialisation changes in European regions: the role played by externalities across regions," Journal of Geographical Systems, Springer, vol. 12(3), pages 311-334, September.
  6. Laurent Van Malderen & Marcel Gérard, 2012. "Tax Interaction Among Walloon Municipalities: Is There Room For Partisan Monopoly Effect?," ERSA conference papers ersa12p1051, European Regional Science Association.
  7. T√∫lio Cravo, 2011. "Regional Economic Growth and SMEs in Brazil: a Spatial Analysis (Submission for the Refereed Y-session Papers)," ERSA conference papers ersa10p508, European Regional Science Association.
  8. David Bartolini & Raffaella Santolini, 2012. "Political yardstick competition among Italian municipalities on spending decisions," The Annals of Regional Science, Springer, vol. 49(1), pages 213-235, August.
  9. Yihua Yu & Li Zhang & Fanghua Li & Xinye Zheng, 2013. "Strategic interaction and the determinants of public health expenditures in China: a spatial panel perspective," The Annals of Regional Science, Springer, vol. 50(1), pages 203-221, February.
  10. Richter, Francisca G.-C. & Craig, Ben R., 2013. "Lending patterns in poor neighborhoods," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 197-206.
  11. José da Silva Costa & Armindo Cravalho, 2013. "Yardstick Competition among Portuguese Municipalities: The Case of Urban Property Tax (IMI)," FEP Working Papers 495, Universidade do Porto, Faculdade de Economia do Porto.
  12. Ahmad, Mahyudin & Hall, Stephen G., 2012. "Institutions and growth: Testing the spatial effect using weight matrix based on the institutional distance concept," MPRA Paper 42294, University Library of Munich, Germany.
  13. George Crowley & Russell Sobel, 2011. "Does fiscal decentralization constrain Leviathan? New evidence from local property tax competition," Public Choice, Springer, vol. 149(1), pages 5-30, October.
  14. Barreira, Ana, 2011. "Spatial Strategic Interaction on Public Expenditures of The Northern Portuguese Local Governments," Spatial and Organizational Dynamics Discussion Papers 2011-2, CIEO-Research Centre for Spatial and Organizational Dynamics, University of Algarve.
  15. Marcel Gérard & Laurent van Malderen, 2012. "Tax Interaction among Walloon Municipalities: Is there Room for Yardstick Competition, Intellectual Trend and Partisan Monopoly Effect?," CESifo Working Paper Series 4025, CESifo Group Munich.
  16. Elhorst, J. Paul & Lacombe, Donald J. & Piras, Gianfranco, 2012. "On model specification and parameter space definitions in higher order spatial econometric models," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 211-220.
  17. Michieka, Nyakundi M. & Pradhan, Archana & Gebremedhin, Tesfa G., 2011. "A Spatial Analysis of Supplemental Nutrition Assistance Program in the Appalachian Region," Journal of Food Distribution Research, Food Distribution Research Society, vol. 42(3), November.
  18. López-Hernández, Fernando A., 2013. "Second-order polynomial spatial error model. Global and local spatial dependence in unemployment in Andalusia," Economic Modelling, Elsevier, vol. 33(C), pages 270-279.

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