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More for everyone: The effect of local interests on spending on infrastructure

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  • Halse, Askill H.

Abstract

A central question in political economy is whether decision-making in representative democracies is biased towards local public investments or other types of policies which have locally concentrated benefits. The model by Weingast et al. (1981) predicts that a legislature with members from different areas will spend more in total on local public goods when the geographic constituency of each member is small. I test this prediction using panel data on the 18 Norwegian regional councils, exploiting that the geographic allocation of regional council seats varies considerably over time. Consistent with the theory, I find robust evidence that investments in regional public roads are lower when many council members come from the more populated areas in the region. This gives a more direct test of the prediction by Weingast et al. (1981) than existing empirical evidence, which concerns the relationship between public spending and legislature size. I find similar but less robust results for the maintenance of existing roads.

Suggested Citation

  • Halse, Askill H., 2016. "More for everyone: The effect of local interests on spending on infrastructure," European Journal of Political Economy, Elsevier, vol. 43(C), pages 41-56.
  • Handle: RePEc:eee:poleco:v:43:y:2016:i:c:p:41-56
    DOI: 10.1016/j.ejpoleco.2016.02.003
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    1. repec:kap:pubcho:v:174:y:2018:i:1:d:10.1007_s11127-017-0488-y is not listed on IDEAS
    2. Gupta, Sanjeev & Liu, Estelle X. & Mulas-Granados, Carlos, 2016. "Now or later? The political economy of public investment in democracies," European Journal of Political Economy, Elsevier, vol. 45(C), pages 101-114.
    3. repec:eee:poleco:v:52:y:2018:i:c:p:166-191 is not listed on IDEAS

    More about this item

    Keywords

    Concentrated gains; Common-pool; Distributive politics; Law of 1/n; Pork-barrel;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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