Convergence in Local Government Spending: Evidence from Wisconsin
AbstractA substantial body of theoretical and empirical evidence demonstrates that interregional competition for factors of production leads to convergence of per capita output. Is there an analogous process that leads to convergence of public sector activity? Skidmore, et al (2004) develop a model that is consistent with the macroeconomic growth literature, which predicts convergence in government spending. Based on this framework, we test for convergence in government spending using detailed data from Wisconsin for a variety of municipal government expenditure categories over the 1989/90-1999/2000 period. Our empirical investigation provides compelling evidence of convergence in capita government spending for all the expenditure categories we study. This work adds to the growing body of evidence demonstrating the existence of underlying dynamic forces that determine growth of government.
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Bibliographic InfoPaper provided by University of Wisconsin, Agricultural and Applied Economics in its series Staff Paper Series with number 483.
Date of creation: Jun 2005
Date of revision:
Find related papers by JEL classification:
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
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