Capital-intensive projects induce more effort than labor-intensive projects
AbstractCentral governments often subsidize capital spending by local governments, instead of subsidizing operating expenses or labor-intensive projects. This paper offers one explanation, focusing on the incentive effects for local officials. a local official can more easily shift the cost of optimizing a project to his successor on a labor-intensive project than on a capital-intensive project.
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces0831.
Date of creation: Dec 2008
Date of revision:
Other versions of this item:
- Amihai Glazer & Stef Proost, 2008. "Capital-Intensive Projects Induce More Effort Than Labor-Intensive Projects," Working Papers 080913, University of California-Irvine, Department of Economics.
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-17 (All new papers)
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