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Competition for Private Capital and Central Grants: The Case of Japanese Industrial Parks

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Author Info
Shun-ichiro Bessho () (Department of Economics, Hitotsubashi University)
Kimiko Terai () (Hosei University)
Abstract

We construct a simple model of fiscal competition taking `rent-seeking' behavior of local governments into account and estimate a policy reaction function based on the model. We consider the scale of public input as each local government's policy tool. Local autonomies' method of seeking central grants often takes the form of personnel exchange with central government. Our estimation of the policy reaction function suggests that such personnel exchange has an effect on the development of industrial parks.

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Paper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 080909.

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Length: 35 pages
Date of creation: Sep 2008
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Handle: RePEc:irv:wpaper:080909

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Related research
Keywords: Business area development; Policy competition; Rent-seeking; Spatial model;

Find related papers by JEL classification:
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
R53 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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