Water, Water, Everywhere: Municipal Finance and Water Supply in American Cities
AbstractThe construction of municipal water systems was a major event in the history of American cities -- bringing relief from disease, providing resources to combat fires, attracting business investment, and promoting development generally. Although the first large-scale municipal water system in the United States was completed in 1801, many American cities lacked waterworks until the turn of the twentieth century. This paper investigates the reason for the century-long delay and the subsequent frenzy of waterworks construction from 1890 through the 1920s. We propose an explanation that emphasizes the development of local public finance. Specifically, we highlight the importance of municipal bond market growth as a facilitator of debt finance. We argue that this explanation is superior to others put forward in the literature, including disease knowledge, the presence of externalities, municipal population density, natural monopoly, contracting difficulties, corruption costs, and growth in the supply of civil engineers.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11096.
Date of creation: Jan 2005
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Publication status: published as Water, Water Everywhere. Municipal Finance and Water Supply in American Cities , David M. Cutler, Grant Miller. in Corruption and Reform: Lessons from America's Economic History , Glaeser and Goldin. 2006
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- David M. Cutler & Grant Miller, 2006. "Water, Water Everywhere. Municipal Finance and Water Supply in American Cities," NBER Chapters, in: Corruption and Reform: Lessons from America's Economic History, pages 153-184 National Bureau of Economic Research, Inc.
- N4 - Economic History - - Government, War, Law, International Relations, and Regulation
- I1 - Health, Education, and Welfare - - Health
- H4 - Public Economics - - Publicly Provided Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-02-01 (All new papers)
- NEP-ENV-2005-02-01 (Environmental Economics)
- NEP-GEO-2005-02-01 (Economic Geography)
- NEP-URE-2005-02-01 (Urban & Real Estate Economics)
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