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Government Form and Public Spending: Theory and Evidence from US Municipalities

  • Stephen Coate
  • Brian Knight

There are two main forms of government in US 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 coexistence 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. (JEL H11, H72, R51)

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Article provided by American Economic Association in its journal American Economic Journal: Economic Policy.

Volume (Year): 3 (2011)
Issue (Month): 3 (August)
Pages: 82-112

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Handle: RePEc:aea:aejpol:v:3:y:2011:i:3:p:82-112
Note: DOI: 10.1257/pol.3.3.82
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  1. Persson, Torsten & Roland , Gérard & Tabellini, Guido, 1997. "Comparative Politics and Public Finance," Seminar Papers 633, Stockholm University, Institute for International Economic Studies.
  2. Eric Maskin & Jean Tirole, 2004. "The Politician and the Judge: Accountability in Government," Economics Working Papers 0020, Institute for Advanced Study, School of Social Science.
  3. Alberto Alesina & Guido Tabellini, 2007. "Bureaucrats or Politicians? Part I: A Single Policy Task," American Economic Review, American Economic Association, vol. 97(1), pages 169-179, March.
  4. 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.
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  6. 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.
  7. Lynn MacDonald, 2008. "The impact of government structure on local public expenditures," Public Choice, Springer, vol. 136(3), pages 457-473, September.
  8. Timothy Besley & Stephen Coate, 2003. "Elected Versus Appointed Regulators: Theory and Evidence," Journal of the European Economic Association, MIT Press, vol. 1(5), pages 1176-1206, 09.
  9. Trebbi, Francesco & Aghion, Philippe & Alesina, Alberto, 2008. "Electoral Rules and Minority Representation in U.S. Cities," Scholarly Articles 4551793, Harvard University Department of Economics.
  10. Persson, Torsten & Roland, Gerard & Tabellini, Guido, 1997. "Separation of Powers and Political Accountability," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1163-1202, November.
  11. Torsten Persson & Guido Tabellini, 2006. "Democracy and Development: The Devil in the Details," Levine's Bibliography 122247000000001139, UCLA Department of Economics.
  12. Reza Baqir, 2002. "Districting and Government Overspending," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1318-1354, December.
  13. Degan, Arianna & Merlo, Antonio, 2009. "Do voters vote ideologically?," Journal of Economic Theory, Elsevier, vol. 144(5), pages 1868-1894, September.
  14. Farnham, Paul G, 1990. " The Impact of Citizen Influence on Local Government Expenditure," Public Choice, Springer, vol. 64(3), pages 201-12, March.
  15. Sass, Tim R, 1991. " The Choice of Municipal Government Structure and Public Expenditures," Public Choice, Springer, vol. 71(1-2), pages 71-87, August.
  16. 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, vol. 20(3), pages 405-25, July.
  17. Levitt, Steven D, 1996. "How Do Senators Vote? Disentangling the Role of Voter Preferences, Party Affiliation, and Senate Ideology," American Economic Review, American Economic Association, vol. 86(3), pages 425-41, June.
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