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Have State and Local Fiscal Policies Become More Alike? Evidence of Beta Convergence Among Fiscal Policy Variables

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  • Christopher N. Annala

    (State University of New York, Geneseo)

Abstract

This article examines the convergence of state and local fiscal policies among the United States. Based on the standard assumptions of the neoclassical growth model with a public sector, it is shown that state and local fiscal policies have indeed converged over the past 20 years, at a rate substantially faster than real per capita gross state product. These results are contradictory to the Tiebout hypothesis.

Suggested Citation

  • Christopher N. Annala, 2003. "Have State and Local Fiscal Policies Become More Alike? Evidence of Beta Convergence Among Fiscal Policy Variables," Public Finance Review, , vol. 31(2), pages 144-165, March.
    • Handle: RePEc:sae:pubfin:v:31:y:2003:i:2:p:144-165
    DOI: 10.1177/1091142102250327
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    References listed on IDEAS

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    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. Michael Wasylenko, 1997. "Taxation and economic development: the state of the economic literature," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 37-52.
    4. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    5. Wildasin, David E., 1988. "Nash equilibria in models of fiscal competition," Journal of Public Economics, Elsevier, vol. 35(2), pages 229-240, March.
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    Cited by:

    1. Lena Maleševic Perovic & Silvia Golem & Maja Mihaljevic Kosor, 2016. "Convergence in Government Spending Components in EU15: A Spatial Econometric Perspective," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 18(42), pages 240-240, May.
    2. Saeid Mahdavi & Joakim Westerlund, 2017. "Are state–local government expenditures converging? New evidence based on sequential unit root tests," Empirical Economics, Springer, vol. 53(2), pages 373-403, September.
    3. Mahdavi, Saeid & Westerlund, Joakim, 2018. "Subnational government tax revenue capacity and effort convergence: New evidence from sequential unit root tests," Economic Modelling, Elsevier, vol. 73(C), pages 174-183.

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