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Leviathan in the Crosshairs

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  • Laurie Bates
  • Rexford Santerre

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Abstract

Following in the spirit of the Leviathan hypothesis, this paper empirically examines how the degree of local government market power influences efficiency in the local public sector. Market power is measured by the number and relative size distribution of similar government units in the same market area. To avoid confusing market power with the comparative efficiency or superiority of larger sized organizations, the relative size distribution of the individual government unit is held constant in the empirical analysis. In the empirical test, aggregate property values serve as the measure of efficiency. The empirical results suggest that aggregate property values are lower and thus efficiency suffers, in more concentrated municipal market areas, ceteris paribus, thus providing some evidence for Leviathan-type governments in Connecticut. Copyright Springer Science + Business Media, Inc. 2006

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 127 (2006)
Issue (Month): 1 (April)
Pages: 133-145

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Handle: RePEc:kap:pubcho:v:127:y:2006:i:1:p:133-145

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Web page: http://www.springerlink.com/link.asp?id=100332

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  1. Noether, Monica, 1988. "Competition among hospitals," Journal of Health Economics, Elsevier, vol. 7(3), pages 259-284, September.
  2. Lynk, William J, 1995. "Nonprofit Hospital Mergers and the Exercise of Market Power," Journal of Law and Economics, University of Chicago Press, vol. 38(2), pages 437-61, October.
  3. Zax, Jeffrey S, 1989. "Is There a Leviathan in Your Neighborhood?," American Economic Review, American Economic Association, vol. 79(3), pages 560-67, June.
  4. Nelson, Michael A, 1987. "Searching for Leviathan: Comment and Extension," American Economic Review, American Economic Association, vol. 77(1), pages 198-204, March.
  5. Katerina Simons & Joanna Stavins, 1998. "Has antitrust policy in banking become obsolete?," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 13-26.
  6. Caroline Minter Hoxby, 1994. "Do Private Schools Provide Competition for Public Schools?," NBER Working Papers 4978, National Bureau of Economic Research, Inc.
  7. Nyman, John A, 1994. "The Effects of Market Concentration and Excess Demand on the Price of Nursing Home Care," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 193-204, June.
  8. Grossman, Philip J. & Mavros, Panayiotis & Wassmer, Robert W., 1999. "Public Sector Technical Inefficiency in Large U.S. Cities," Journal of Urban Economics, Elsevier, vol. 46(2), pages 278-299, September.
  9. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
  10. Caroline M. Hoxby, 2000. "Does Competition among Public Schools Benefit Students and Taxpayers?," American Economic Review, American Economic Association, vol. 90(5), pages 1209-1238, December.
  11. Shepherd, William G, 1972. "The Elements of Market Structure," The Review of Economics and Statistics, MIT Press, vol. 54(1), pages 25-37, February.
  12. Rexford E. Santerre, 1991. "Leviathan or Median-Voter: Who Runs City Hall?," Eastern Economic Journal, Eastern Economic Association, vol. 17(1), pages 5-14, Jan-Mar.
  13. Lori L. Taylor, 2000. "The evidence on government competition," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q2, pages 2-10.
  14. Forbes, Kevin F & Zampelli, Ernest M, 1989. "Is Leviathan a Mythical Beast?," American Economic Review, American Economic Association, vol. 79(3), pages 568-77, June.
  15. Bates, Laurie J. & Santerre, Rexford E., 2003. "The impact of a state mandated expenditure floor on aggregate property values," Journal of Urban Economics, Elsevier, vol. 53(3), pages 531-540, May.
  16. Deller, Steven C., 1990. "An application of a test for allocative efficiency in the local public sector," Regional Science and Urban Economics, Elsevier, vol. 20(3), pages 395-406, November.
  17. Laurie J. Bates, 1993. "Municipal Monopoly Power and the Supply of Residential Development Rights," Eastern Economic Journal, Eastern Economic Association, vol. 19(2), pages 173-184, Spring.
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Cited by:
  1. Stephen Billings & Thomas Thibodeau, 2011. "Intrametropolitan Decentralization: Is Government Structure Capitalized in Residential Property Values?," The Journal of Real Estate Finance and Economics, Springer, vol. 42(4), pages 416-450, May.

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