On the optimal structure of local governments
AbstractThe authors show that space matters in designing the optimal provision of local public goods. Geography imposes a particular institutional structure of local governments due to the overlapping of market areas associated with different local public goods. The optimum can be decentralized through local governments that have jurisdiction over market areas of all local public good types. This implies that the appropriate suppliers of local public goods are metropolitan governments which finance them through user charges and land rent. In addition, the authors' approach invalidates the prevailing theory of fiscal federalism, according to which a layer of government should be established for each type of local public good. Copyright 1995 by American Economic Association.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers RP with number -1185.
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Note: In : The American Economic Review, 85, (5), 1224-1240, 1995
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- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
- R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
- R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
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- Mototsugu Fukushige & Yingxin Shi, 2014. "Efficient Scale of Local Government in China: Quantile Regression Approach to County-Level Data," Discussion Papers in Economics and Business 14-15, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
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- Matthias Wrede, 2006. "Labor and household mobility: efficiency and equilibrium," The Annals of Regional Science, Springer, vol. 40(1), pages 117-131, March.
- Brueckner, Jan K., 1998. "Testing for Strategic Interaction Among Local Governments: The Case of Growth Controls," Journal of Urban Economics, Elsevier, vol. 44(3), pages 438-467, November.
- Grégoire ROTA GRAZIOSI, 2001. "Une analyse économique de la sécession," Discussion Papers (REL - Recherches Economiques de Louvain) 2001034, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Lawrence Southwick, 2005. "Sewer plant operating efficiency, patronage, and competition," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 1-13.
- Stephen Billings & Thomas Thibodeau, 2011. "Intrametropolitan Decentralization: Is Government Structure Capitalized in Residential Property Values?," The Journal of Real Estate Finance and Economics, Springer, vol. 42(4), pages 416-450, May.
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