This chapter considers the role of economic and political institutions in the formation of local public policies. The chapter has three objectives. First, to synthesize the dominant models of local policy formation with mobile households, with particular emphasis on the objectives that are attributed to the institutions that provide collective goods. Second, to describe and model local political institutions, and consider their implications for taxes, expenditures and voting behavior. Third, to examine how institutional change, specifically the entry of new institutions in the form of private government, influences policy outcomes and the welfare of residents.
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ReDIF This chapter was published in: J. V. Henderson & J. F. Thisse (ed.) Handbook of Regional and Urban Economics, , chapter 54, pages 2381-2421, 2004.
Find related papers by JEL classification: R1 - Urban, Rural, and Regional Economics - - General Regional Economics
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