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Does local council size affect land development expenditure? Quasi-experimental evidence from Japanese municipal data

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  • Hirota, Haruaki
  • Yunoue, Hideo
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    Abstract

    The purpose of this paper is to evaluate a fiscal common-pool problem in a Japanese local government. Especially, we focus on the relationship between council size and land development expenditure of local government using a dataset of 13,989 municipalities in Japan from FY2001 to FY2006. We deal with an identification of causal effects by applying regression discontinuity design’s framework to address problem of endogeneity bias. Our results show that land development expenditure of small municipalities induce the fiscal common-pool problem over public projects.

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    File URL: http://mpra.ub.uni-muenchen.de/43723/
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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 43723.

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    Date of creation: Jan 2013
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    Handle: RePEc:pra:mprapa:43723

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    Related research

    Keywords: fiscal common-pool problem; council size; government expenditure; regression discontinuity design;

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    1. Peter Egger & Marko Koethenbuerger, 2010. "Government Spending and Legislative Organization: Quasi-experimental evidence from Germany," EPRU Working Paper Series 2010-09, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    2. Per Pettersson-Lidbom, 2004. "Does the Size of the Legislature Affect the Size of Government? Evidence from Two Natural Experiments," Discussion Papers 350, Government Institute for Economic Research Finland (VATT).
    3. Weingast, Barry R & Shepsle, Kenneth A & Johnsen, Christopher, 1981. "The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 642-64, August.
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