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 University of California-Irvine, Department of Economics in its series Working Papers with number 080913.
Date of creation: Dec 2008
Date of revision:
Federalism; Capital subsidies; Transit subsidies;
Other versions of this item:
- Amihai GLAZER & Stef PROOST, 2008. "Capital-intensive projects induce more effort than labor-intensive projects," Center for Economic Studies - Discussion papers ces0831, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- 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
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