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Government Form and Public Spending: Theory and Evidence from U.S. Municipalities

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  • Stephen Coate
  • Brian Knight

Abstract

There are two main forms of government in U.S. cities: council-manager and mayor-council. This paper develops a theory of fiscal policy determination under these two forms. The theory predicts that expected public spending will be lower under mayor-council, but that either form of government could be favored by a majority of citizens. The latter prediction means that the theory is consistent with the co-existence of both government forms. Support for the former prediction is found in both a cross-sectional analysis and a panel analysis of changes in government form.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14857.

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Date of creation: Apr 2009
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Publication status: published as Stephen Coate & Brian Knight, 2011. "Government Form and Public Spending: Theory and Evidence from US Municipalities," American Economic Journal: Economic Policy, American Economic Association, vol. 3(3), pages 82-112, August.
Handle: RePEc:nbr:nberwo:14857

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  1. Torsten Persson & Guido Tabellini, 2006. "Democracy and Development: The Devil in the Details," CESifo Working Paper Series 1672, CESifo Group Munich.
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  5. Reza Baqir, 2002. "Districting and Government Overspending," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 110(6), pages 1318-1354, December.
  6. Sass, Tim R, 1991. " The Choice of Municipal Government Structure and Public Expenditures," Public Choice, Springer, Springer, vol. 71(1-2), pages 71-87, August.
  7. Persson, Torsten & Roland, Gérard & Tabellini, Guido, 1997. "Comparative Politics and Public Finance," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1737, C.E.P.R. Discussion Papers.
  8. Eric Maskin, 2003. "The Politician and the Judge: Accountability in Government," Theory workshop papers, UCLA Department of Economics 505798000000000076, UCLA Department of Economics.
  9. Timothy Besley & Stephen Coate, 2003. "Elected Versus Appointed Regulators: Theory and Evidence," Journal of the European Economic Association, MIT Press, MIT Press, vol. 1(5), pages 1176-1206, 09.
  10. Edwards, Linda N & Edwards, Franklin R, 1982. "Public Unions, Local Government Structure and the Compensation of Municipal Sanitation Workers," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 20(3), pages 405-25, July.
  11. Alberto Alesina & Guido Tabellini, 2007. "Bureaucrats or Politicians? Part I: A Single Policy Task," American Economic Review, American Economic Association, American Economic Association, vol. 97(1), pages 169-179, March.
  12. Degan, Arianna & Merlo, Antonio, 2009. "Do voters vote ideologically?," Journal of Economic Theory, Elsevier, Elsevier, vol. 144(5), pages 1868-1894, September.
  13. Trebbi, Francesco & Aghion, Philippe & Alesina, Alberto, 2008. "Electoral Rules and Minority Representation in U.S. Cities," Scholarly Articles 4551793, Harvard University Department of Economics.
  14. Jonathan Levin & Steven Tadelis, 2007. "Contracting for Government Services: Theory and Evidence from U.S. Cities," NBER Working Papers 13350, National Bureau of Economic Research, Inc.
  15. Lynn MacDonald, 2008. "The impact of government structure on local public expenditures," Public Choice, Springer, Springer, vol. 136(3), pages 457-473, September.
  16. Farnham, Paul G, 1990. " The Impact of Citizen Influence on Local Government Expenditure," Public Choice, Springer, Springer, vol. 64(3), pages 201-12, March.
  17. Ehrenberg, Ronald G. & Goldstein, Gerald S., 1975. "A model of public sector wage determination," Journal of Urban Economics, Elsevier, vol. 2(3), pages 223-245, July.
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Cited by:
  1. Ruben Enikolopov, 2010. "Politicians, Bureaucrats and Targeted Redistribution: The Role of Career Concerns," Working Papers w0148, Center for Economic and Financial Research (CEFIR).
  2. Gergely Ujhelyi, 2014. "Civil Service Rules and Policy Choices: Evidence from US State Governments," American Economic Journal: Economic Policy, American Economic Association, American Economic Association, vol. 6(2), pages 338-80, May.
  3. Peter Egger & Marko Koethenbuerger & Michael Smart, 2010. "Electoral rules and incentive effects of fiscal transfers: evidence from Germany," Working Papers 2010/44, Institut d'Economia de Barcelona (IEB).
  4. Kessler, Anke, 2010. "Communication in Federal Politics: Universalism, Policy Uniformity, and the Optimal Allocation of Fiscal Authority," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7910, C.E.P.R. Discussion Papers.
  5. Garmann, Sebastian, 2013. "Elected or Appointed? How the Nomination Scheme of the City Manager Influences the Effects of Government Fragmentation," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79892, Verein für Socialpolitik / German Economic Association.
  6. Edward L. Glaeser, 2012. "Urban Public Finance," NBER Working Papers 18244, National Bureau of Economic Research, Inc.
  7. Gergely Ujhelyi, 2012. "Civil Service Reform," Working Papers, Department of Economics, University of Houston 201303216, Department of Economics, University of Houston.
  8. Ruben Enikolopov, 2011. "Are Bureaucrats Really Paid Like Bureaucrats?," Working Papers w0165, Center for Economic and Financial Research (CEFIR).
  9. Alexander Whalley, 2013. "Elected versus Appointed Policy Makers: Evidence from City Treasurers," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 56(1), pages 39 - 81.
  10. Köthenbürger, Marko & Egger, Peter & Smart, Michael, 2013. "Do Electoral Rules Make Legislators Differently Responsive to Fiscal Transfers? Evidence from German Municipalities," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79972, Verein für Socialpolitik / German Economic Association.
  11. Mark Partridge & Tim Sass, 2011. "The productivity of elected and appointed officials: the case of school superintendents," Public Choice, Springer, Springer, vol. 149(1), pages 133-149, October.

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