The Impact of Mandates and Tax Limits on Voluntary Contributions to Local Public Services: An Application to Fire Protection Services
AbstractThe past twenty-five years have seen a tremendous increase in interventions by state governments into local public service provision through mandates related to employee compensation and production processes and tax and spending limitations. Reflecting this phenomena, a substantial literature has arisen examining the impact of these mandates on both spending on and the quality of public services. Here, we focus on another impact of mandates on public services, the use of volunteers and fund-raising by local governments. We develop a model of contributions to local public services, which predicts that tax limits increase both the use of volunteers and fund-raising and mandates increase the use of volunteers. These predictions are then tested using data on 1,846 fire-protection departments in twenty-eight states in 1993. Specifically, we examine how the existence of mandates and tax limits influences the type of department (volunteer; paid; or combined) as well as on the extent of fund-raising. The results of our empirical work generally support our theoretical predictions. The existence a tax limit makes it 11% more likely that a department (of mean characteristics) is volunteer and 10% more likely that it engages in fund-raising. A mandated pension increases the probability that a department is volunteer by 13% and increases the likelihood that it engages in fund-raising by approximately 7%.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by EconWPA in its series Public Economics with number 9704002.
Length: 37 pages
Date of creation: 16 Apr 1997
Date of revision:
Note: Type of Document - Binary Word for Windows (V.6/7) document; prepared on IBM PC Compat.; to print on HP LaserJet; pages: 37
Contact details of provider:
Web page: http://184.108.40.206
Find related papers by JEL classification:
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rhine, Sherrie L W, 1989. "The Effect of State Mandates on Student Performance," American Economic Review, American Economic Association, vol. 79(2), pages 231-35, May.
- Case, Anne C. & Rosen, Harvey S. & Hines, James Jr., 1993. "Budget spillovers and fiscal policy interdependence : Evidence from the states," Journal of Public Economics, Elsevier, vol. 52(3), pages 285-307, October.
- Kingma, Bruce Robert, 1989. "An Accurate Measurement of the Crowd-Out Effect, Income Effect, and Price Effect for Charitable Contributions," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1197-1207, October.
- Freeman, Richard B, 1997.
"Working for Nothing: The Supply of Volunteer Labor,"
Journal of Labor Economics,
University of Chicago Press, vol. 15(1), pages S140-66, January.
- Richard B. Freeman, 1996. "Working for Nothing: The Supply of Volunteer Labor," NBER Working Papers 5435, National Bureau of Economic Research, Inc.
- Freeman, Richard Barry, 1997. "Working for Nothing: The Supply of Volunteer Labor," Scholarly Articles 4632239, Harvard University Department of Economics.
- Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-83, May.
- William D. Duncombe, 1991. "Demand for Local Public Services Revisited: the Case of Fire Protection," Public Finance Review, , vol. 19(4), pages 412-436, October.
- Menchik, Paul L. & Weisbrod, Burton A., 1987. "Volunteer labor supply," Journal of Public Economics, Elsevier, vol. 32(2), pages 159-183, March.
- Figlio, David N., 1997. "Did the "tax revolt" reduce school performance?," Journal of Public Economics, Elsevier, vol. 65(3), pages 245-269, September.
- Poterba, James M & Rueben, Kim S, 1995. "The Effect of Property-Tax Limits on Wages and Employment in the Local Public Sector," American Economic Review, American Economic Association, vol. 85(2), pages 384-89, May.
- Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-41, June.
- Brueckner, Jan K., 1981. "Congested public goods: The case of fire protection," Journal of Public Economics, Elsevier, vol. 15(1), pages 45-58, February.
- Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
- Bogart, William T., 1991. "Observable Heterogeneity and the Demand for Local Public Spending," National Tax Journal, National Tax Association, vol. 44(2), pages 213-23, June.
- Brown, Eleanor & Lankford, Hamilton, 1992. "Gifts of money and gifts of time estimating the effects of tax prices and available time," Journal of Public Economics, Elsevier, vol. 47(3), pages 321-341, April.
- Harold W. Elder, 1992. "Exploring the Tax Revolt: an Analysis of the Effects of State Tax and Expenditure Limitation Laws," Public Finance Review, , vol. 20(1), pages 47-63, January.
- Bergstrom, Theodore C & Goodman, Robert P, 1973. "Private Demands for Public Goods," American Economic Review, American Economic Association, vol. 63(3), pages 280-96, June.
- Burton Abrams & William Dougan, 1986. "The effects of constitutional restraints on governmental spending," Public Choice, Springer, vol. 49(2), pages 101-116, January.
- Borcherding, Thomas E & Deacon, Robert T, 1972. "The Demand for the Services of Non-Federal Governments," American Economic Review, American Economic Association, vol. 62(5), pages 891-901, December.
- Ron Cheung, 2005. "The Effect of Property Tax Limitations on Residential Private Governments," Working Papers wp2005_05_01, Department of Economics, Florida State University.
- Singhal, Monica & Olken, Benjamin A., 2009.
4449108, Harvard Kennedy School of Government.
- Benjamin A. Olken & Monica Singhal, 2009. "Informal Taxation," NBER Working Papers 15221, National Bureau of Economic Research, Inc.
- Olken, Benjamin A. & Singhal, Monica, 2009. "Informal Taxation," Working Paper Series rwp09-033, Harvard University, John F. Kennedy School of Government.
- Olken, Benjamin A. & Singhal, Monica, 2011. "Informal Taxation," Scholarly Articles 5689166, Harvard Kennedy School of Government.
- Brunet, Alexia & McNamara, Kevin T. & Deboer, Larry, 2001. "Alternative Service Delivery Strategies For Local Governments," 2001 Annual meeting, August 5-8, Chicago, IL 20705, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).
If references are entirely missing, you can add them using this form.