Advanced Search
MyIDEAS: Login to save this article or follow this journal

Expenditure spillovers and fiscal interactions: Empirical evidence from local governments in Spain

Contents:

Author Info

  • Sole-Olle, Albert

Abstract

The paper presents a framework for measuring spillovers resulting from local expenditure policies. We identify and test for two different types of expenditure spillovers: (i) "benefit spillovers", arising from the provision of local public goods, and (ii) "crowding spillovers", arising from the crowding of facilities by residents in neighboring jurisdictions. Benefit spillovers are accounted for by assuming that the representative resident enjoys the consumption of a local public good in both his own community and in those surrounding it. Crowding spillovers are included by considering that a locality's consumption level is influenced by the population living in the surrounding localities. We estimate a reaction function, with interactions between local governments occurring not only between expenditure levels, but also between neighbors' populations and expenditures. The equation is estimated using data on more than 2,500 Spanish local governments for the year 1999. The results show that both types of spillovers are relevant.

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6WMG-4HP6G2J-2/2/1ac4199433f25760e05f83312634ea9a
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 59 (2006)
Issue (Month): 1 (January)
Pages: 32-53

as in new window
Handle: RePEc:eee:juecon:v:59:y:2006:i:1:p:32-53

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622905

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers 0151, National Bureau of Economic Research, Inc.
  2. Saavedra, Luz Amparo, 2000. "A Model of Welfare Competition with Evidence from AFDC," Journal of Urban Economics, Elsevier, vol. 47(2), pages 248-279, March.
  3. Arnott, Richard & Grieson, Ronald E., 1981. "Optimal fiscal policy for a state or local government," Journal of Urban Economics, Elsevier, vol. 9(1), pages 23-48, January.
  4. Boskin, Michael J, 1973. "Local Government Tax and Product Competition and the Optimal Provision of Public Goods," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 81(1), pages 203-10, Jan.-Feb..
  5. Baicker, Katherine, 2005. "The spillover effects of state spending," Journal of Public Economics, Elsevier, Elsevier, vol. 89(2-3), pages 529-544, February.
  6. Timothy Besley & Anne Case, 1992. "Incumbent Behavior: Vote Seeking, Tax Setting and Yardstick Competition," NBER Working Papers 4041, National Bureau of Economic Research, Inc.
  7. Borcherding, Thomas E & Deacon, Robert T, 1972. "The Demand for the Services of Non-Federal Governments," American Economic Review, American Economic Association, American Economic Association, vol. 62(5), pages 891-901, December.
  8. William J. Furlong & Stephen L. Mehay, 1981. "Urban Law Enforcement in Canada: An Empirical Analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 14(1), pages 44-57, February.
  9. Brueckner, Jan K. & Saavedra, Luz A., 2001. "Do Local Governments Engage in Strategic Property-Tax Competition?," National Tax Journal, National Tax Association, vol. 54(n. 2), pages 203-30, June.
  10. Pauly, Mark V, 1970. "Optimality, 'Public' Goods, and Local Governments: A General Theoretical Analysis," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 78(3), pages 572-85, May-June.
  11. Le Grand, Julian, 1975. "Fiscal Equity and Central Government Grants to Local Authorities," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 85(339), pages 531-47, September.
  12. Simon Hakim & Arie Ovadia & Eli Sagi & J. Weinblatt, 1979. "Interjurisdictional Spillover of Crime and Police Expenditure," Land Economics, University of Wisconsin Press, vol. 54(2), pages 200-212.
  13. Andrew F. Haughwout, 1999. "Regional fiscal cooperation in metropolitan areas: An exploration," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 18(4), pages 579-600.
  14. Craig Brett & Joris Pinkse, 2000. "The determinants of municipal tax rates in British Columbia," Canadian Journal of Economics, Canadian Economics Association, vol. 33(3), pages 695-714, August.
  15. Roger H. Gordon, 1982. "An Optimal Taxation Approach to Fiscal Federalism," NBER Working Papers 1004, National Bureau of Economic Research, Inc.
  16. Buettner, Thiess, 2001. "Local business taxation and competition for capital: the choice of the tax rate," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 31(2-3), pages 215-245, April.
  17. Case, Anne C. & Rosen, Harvey S. & Hines, James Jr., 1993. "Budget spillovers and fiscal policy interdependence : Evidence from the states," Journal of Public Economics, Elsevier, Elsevier, vol. 52(3), pages 285-307, October.
  18. Conley, John & Dix, Manfred, 1999. "Optimal and Equilibrium Membership in Clubs in the Presence of Spillovers," Journal of Urban Economics, Elsevier, vol. 46(2), pages 215-229, September.
  19. Albert Solé-Ollé & Elisabet Viladecans-Marsal, 2004. "Central Cities as Engines of Metropolitan Area Growth," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 44(2), pages 321-350.
  20. Albert Solé-Ollé & Núria Bosch, 2005. "On the Relationship between Authority Size and the Costs of Providing Local Services: Lessons for the Design of Intergovernmental Transfers in Spain," Public Finance Review, , vol. 33(3), pages 343-384, May.
  21. Figlio, David N. & Kolpin, Van W. & Reid, William E., 1999. "Do States Play Welfare Games?," Journal of Urban Economics, Elsevier, vol. 46(3), pages 437-454, November.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:juecon:v:59:y:2006:i:1:p:32-53. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.