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Essays on Finnish Municipal Finance and Intergovernmental Grants

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  • Antti Moisio

Abstract

This PhD thesis is a collection of studies on Finnish municipal expenditures, revenues and intergovernmental grants. The main purpose of the study was to analyse the municipal expenditure variation between the matching grants system and the formula based grants system. The aim was also to analyse the expenditure effect of grants compared to that of taxable incomes and to reveal possible causal interrelationships between municipalities' revenues and expenditures. The first chapter introduces the theoretical aspects of local government finance. The second chapter analyses municipal expenditures using economic and demographic factors as explanatory variables. Chapter three analyses the effect of noninstitutional care on municipalities' elderly care expenditures and Finnish Social Security Institution expenditures. Chapter four examines the inter-temporal causal links between municipal own source revenue and spending decisions. Chapter five analyses the same causal links in subsections of municipalities, formed using population and economic condition as criteria.

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Bibliographic Info

Paper provided by Government Institute for Economic Research Finland (VATT) in its series Research Reports with number 93.

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Date of creation: 08 Nov 2002
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Handle: RePEc:fer:resrep:93

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Keywords: Grant reform; municipal expenditure variation; causality between municipal revenues and expenditures;

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References

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  1. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1988. "Estimating Vector Autoregressions with Panel Data," Econometrica, Econometric Society, vol. 56(6), pages 1371-95, November.
  2. Douglas Holtz-Eakin & Harvey S. Rosen, 1989. "Intertemporal analysis of state and local government spending: theory and tests," Working Papers 89-4, Federal Reserve Bank of Philadelphia.
  3. Andrew B. Abel & Olivier J. Blanchard, 1983. "The Present Value of Profits and Cyclical Movements in Investment," NBER Working Papers 1122, National Bureau of Economic Research, Inc.
  4. Dahlberg, Matz & Johansson, Eva, 1997. "An Examination of the Dynamic Behavior of Local Governments Using GMM Bootstrapping Methods," Working Paper Series 1997:11, Uppsala University, Department of Economics.
  5. Barro, Robert J., 1979. "On the Determination of the Public Debt," Scholarly Articles 3451400, Harvard University Department of Economics.
  6. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
  7. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November.
  8. Matz Dahlberg & Eva Johansson, 1998. "The revenues-expenditures nexus: panel data evidence from Swedish municipalities," Applied Economics, Taylor & Francis Journals, vol. 30(10), pages 1379-1386.
  9. Alan T. Peacock & Jack Wiseman, 1979. "Approaches To the Analysis of Government Expenditure Growth," Public Finance Review, , vol. 7(1), pages 3-23, January.
  10. N. Gregory Mankiw, 1987. "The Optimal Collection of Seigniorage: Theory and Evidence," NBER Working Papers 2270, National Bureau of Economic Research, Inc.
  11. Douglas Holtz-Eakin & Harvey S. Rosen, 1991. "Municipal Labor Demand in the Presence of Uncertainty: An Econometric Approach," NBER Working Papers 3516, National Bureau of Economic Research, Inc.
  12. Filimon, Radu & Romer, Thomas & Rosenthal, Howard, 1982. "Asymmetric information and agenda control : The bases of monopoly power in public spending," Journal of Public Economics, Elsevier, vol. 17(1), pages 51-70, February.
  13. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-87, December.
  14. Bergström, Pål & Dahlberg, Matz & Johansson, Eva, 1998. "Municipal labour demand," Working Paper Series 1998:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  15. Dahlberg, Matz & Lindström , Tomas, 1996. "Are Local Governments Governed by Forward Looking Decision Makers?," Working Paper Series 1996:20, Uppsala University, Department of Economics.
  16. Borge, Lars-Erik & Rattso, Jorn & Sorensen, Rune, 1995. " Local Government Service Production: The Politics of Allocative Sluggishness," Public Choice, Springer, vol. 82(1-2), pages 135-57, January.
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Cited by:
  1. Juho Aaltonen & Tanja Kirjavainen & Antti Moisio, 2006. "Efficiency and Productivity in Finnish Comprehensive Schooling 1998-2004," Research Reports 127, Government Institute for Economic Research Finland (VATT).
  2. Matz Dahlberg & Eva Mörk, 2011. "Is there an election cycle in public employment? Separating time effects from election year effects," Working Papers 2011/8, Institut d'Economia de Barcelona (IEB).

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