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Distribution of Local Government Revenue Sources and Citizen Well-Being

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  • Amanor-Boadu, Vincent
  • Zereyesus, Yacob Abrehe
  • Ross, Kara L.

Abstract

The paper aims at examining how sources and distribution of revenue at the local government level influence the economic well-being of citizens. The results of this study help to illuminate the effect of revenue sources on local government efforts on economic development and their capacity to influence the well-being of their citizens. We hypothesized that the distribution of local government revenue influenced the wealth status of its citizens. Three empirical proxy measures for citizen well-being were used in the estimation of three different panel data models. Results from the estimations suggest that local government revenue generated from its citizens (e.g., taxes, insurance and charges) have more influence on citizen well-being than non-citizen generated revenue sources (e.g., inter-governmental transfers). The analysis provides insights into how economic development policies may be conceived in local governments, especially small communities, to ensure sustained economic prosperity of its citizens.

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Bibliographic Info

Paper provided by Southern Agricultural Economics Association in its series 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia with number 46828.

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Date of creation: 2009
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Handle: RePEc:ags:saeana:46828

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Keywords: Local government; revenues; tax; citizen well-being; Community/Rural/Urban Development;

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  1. Dejuan, Joseph P & Seater, John J & Wirjanto, Tony S, 2004. "A Direct Test of the Permanent Income Hypothesis with an Application to the U.S. States," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(6), pages 1091-1103, December.
  2. Breusch, T.S. & Pagan, A.R., . "The Lagrange multiplier test and its applications to model specification in econometrics," CORE Discussion Papers RP -412, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
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