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Explaining Gaps In Infrastructure Investment By Municipal Governments In Australia

Author

Listed:
  • PHIL SIMMONS

    (School of Business, University of New England, Armidale, Australia)

  • BRIAN DOLLERY

    (School of Business, University of New England, Armidale, Australia†Faculty of Economics, Yokohama National University, Yokohama, Japan)

Abstract

Shortfalls in infrastructure expenditure represent a ubiquitous problem in all Australian local government systems as well as in many other countries. In this paper, we use an evolutionary model to describe how local government investment decisions are made. We demonstrate that fear of reputational damage among elected councilors could cause herding behavior resulting in convergent and overly cautious investment behavior by councils. Under these conditions, divergent viewpoints amongst council members are discouraged and local government may become moribund in its decision-making. We show how this may result in “gaps†in infrastructure investment.

Suggested Citation

  • Phil Simmons & Brian Dollery, 2023. "Explaining Gaps In Infrastructure Investment By Municipal Governments In Australia," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(02), pages 457-466.
    • Handle: RePEc:wsi:serxxx:v:68:y:2023:i:02:n:s0217590819500024
    DOI: 10.1142/S0217590819500024
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    More about this item

    Keywords

    Local government; infrastructure; herding behavior;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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