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Does government fragmentation enhance or hinder metropolitan economic growth?

Author

Listed:
  • Grassmueck, Georg
  • Shields, Martin

Abstract

Economic growth is an important priority for many local governments. There is a longstanding theoretical debate on how to best organize government for economic growth. There is surprisingly little empirical research focusing on how government organization affects regional growth. In this paper we forward several recent measures of government fragmentation in contrast to the common measure of government units per capita to examine how government competition influences growth, testing them in a metropolitan statistics area (MSA) growth model for 1992−2002. Going somewhat against the current embrace of regional collaboration, our results suggest that regions with relatively fragmented governments had stronger relative economic performance over the study's time frame.

Suggested Citation

Handle: RePEc:eee:paresc:v:89:y:2010:i:3:p:641-658
DOI: 10.1111/j.1435-5957.2010.00278.x
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JEL classification:

  • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
  • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
  • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
  • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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