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Expansionary zoning and the strategic behaviour of local governments

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  • Miriam Hortas-Rico
  • Miguel Gómez-Antonio

Abstract

This paper analyses the extent to which local land supply is the result of strategic interaction among nearby local governments. In a setting of limited tax instruments to raise revenues and interjurisdictional competition for mobile residents, municipal authorities are provided with the economic incentives to convert land from rural to urban uses, hence promoting urban growth. Using data on a large sample of Spanish municipalities for the period 2003–11 and a modified Cournot-style competition model, we report evidence in support of this hypothesis. The results suggest that local incumbents do not make policy decisions in isolation, and reaction functions arise because the mobile tax base reacts to the regulatory measures that modify land uses in each municipality.

Suggested Citation

  • Miriam Hortas-Rico & Miguel Gómez-Antonio, 2020. "Expansionary zoning and the strategic behaviour of local governments," Regional Studies, Taylor & Francis Journals, vol. 54(3), pages 388-402, March.
  • Handle: RePEc:taf:regstd:v:54:y:2020:i:3:p:388-402
    DOI: 10.1080/00343404.2019.1634801
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    Cited by:

    1. Liu, Yuan & Gao, Hong & Cai, Jiming & Lu, Yang & Fan, Zhenyu, 2022. "Urbanization path, housing price and land finance: International experience and China’s facts," Land Use Policy, Elsevier, vol. 113(C).
    2. Deslatte, Aaron & Szmigiel-Rawska, Katarzyna & Tavares, António F. & Ślawska, Justyna & Karsznia, Izabela & Łukomska, Julita, 2022. "Land use institutions and social-ecological systems: A spatial analysis of local landscape changes in Poland," Land Use Policy, Elsevier, vol. 114(C).
    3. Xi, Qiangmin & Mei, Lin, 2022. "How did development zones affect China’s land transfers? The scale, marketization, and resource allocation effect," Land Use Policy, Elsevier, vol. 119(C).

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