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Spatial fiscal interactions among French municipalities within inter-municipal groups

Author

Listed:
  • Marie-Laure Breuillé

    (CESAER - Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux - INRA - Institut National de la Recherche Agronomique - AgroSup Dijon - Institut National Supérieur des Sciences Agronomiques, de l'Alimentation et de l'Environnement)

  • Julie Le Gallo

    (CESAER - Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux - INRA - Institut National de la Recherche Agronomique - AgroSup Dijon - Institut National Supérieur des Sciences Agronomiques, de l'Alimentation et de l'Environnement)

Abstract

Based on a unique data set of French municipalities and a large number of budgetary variables, we estimate the extent of spatial fiscal interaction among the 33,484 French municipalities in 2008 by accounting for inter-municipal cooperation. Using a spatial autoregressive model with inter-municipal group fixed effects, we show that spatial interactions among French municipalities are inflated by correlated effects that affect similarly municipalities that cooperate together. Removing these confounding effects leads to considerably smaller positive spatial interactions for tax decisions and even negative ones for capital expenditures. In addition, we observe a clear distinction between complementary choices on current budget items and substitutable choices on capital budget items.

Suggested Citation

  • Marie-Laure Breuillé & Julie Le Gallo, 2017. "Spatial fiscal interactions among French municipalities within inter-municipal groups," Post-Print hal-02943323, HAL.
    • Handle: RePEc:hal:journl:hal-02943323
    DOI: 10.1080/00036846.2017.1287861
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    Cited by:

    1. Magdalena Karska & Andrzej Torój, 2018. "Strategiczne interakcje przestrzenne między decyzjami wydatkowymi gmin w Polsce w latach 2008–2014," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 53, pages 29-46.

    More about this item

    Keywords

    Inter-municipal cooperation; spatial autocorrelation; fiscal decisions interaction; C31; H71; H72;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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