Parochial interests and the centralized provision of local public goods: evidence from congressional voting on transportation projects
Local public goods financed from a national tax base provide concentrated benefits to receipient jurisdictions but disperse costs, creating incentives for legislators to increase own-district spending but to restrain aggregate spending due to the associated tax costs. While these common pool incentives underpin a variety of theoretical analyses, which tend to predict inefficiencies in the allocation of public goods, there is little direct evidence that individual legislators respond to such incentives. To test for reactions to such incentives, this paper analyzes 1998 Congressional votes over transportation project funding. The empirical results provide evidence that legislators respond to common pool incentives: the probability of supporting the projects is increasing in own-district spending and decreasing in the tax burden associated with aggregate spending. Having found that legislators do respond to such incentives, I use the parameter estimates to calculate the efficient level of public goods, which suggest over-spending in aggregate, especially in politically powerful districts, and large associated deadweight loss.
(This abstract was borrowed from another version of this item.)
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Timothy Besley & Stephen Coate, 1999.
"Centralized versus Decentralized Provision of Local Public Goods: A Political Economy Analysis,"
NBER Working Papers
7084, National Bureau of Economic Research, Inc.
- Besley, Timothy J. & Coate, Stephen, 2000. "Centralized versus Decentralized Provision of Local Public Goods: a Political Economy Analysis," CEPR Discussion Papers 2495, C.E.P.R. Discussion Papers.
- Lockwood, Ben, 1998.
"Distributive Politics and the Benefits of Decentralisation,"
CSGR Working papers series
10/98, Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick.
- Lockwood, B., 1998. "Distributive Politics and the Benefits of Decentralization," The Warwick Economics Research Paper Series (TWERPS) 513, University of Warwick, Department of Economics.
- Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
- Brian Knight, 2002. "Endogenous Federal Grants and Crowd-out of State Government Spending: Theory and Evidence from the Federal Highway Aid Program," American Economic Review, American Economic Association, vol. 92(1), pages 71-92, March.
- Gilligan, Thomas W & Matsusaka, John G, 1995. "Deviations from Constituent Interests: The Role of Legislative Structure and Political Parties in the States," Economic Inquiry, Western Economic Association International, vol. 33(3), pages 383-401, July.
- Reza Baqir, 2002. "Districting and Government Overspending," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1318-1354, December.
- Persson, Torsten & Tabellini, Guido, 2002.
"Political economics and public finance,"
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659
- Torsten Persson & Guido Tabellini, 1999. "Political Economics and Public Finance," NBER Working Papers 7097, National Bureau of Economic Research, Inc.
- Persson, Torsten & Tabellini, Guido, 1999. "Political Economics and Public Finance," CEPR Discussion Papers 2235, C.E.P.R. Discussion Papers.
- Torsten Persson & Guido Tabellini, . "Political Economics and Public Finance," Working Papers 149, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Chari, V V & Jones, Larry E & Marimon, Ramon, 1997.
"The Economics of Split-Ticket Voting in Representative Democracies,"
American Economic Review,
American Economic Association, vol. 87(5), pages 957-76, December.
- V. V. Chari & Larry E. Jones & Ramon Marimon, 1997. "The economics of split-ticket voting in representative democracies," Working Papers 582, Federal Reserve Bank of Minneapolis.
- Gary Chamberlain, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 225-238.
- Crain, W Mark, 1999. "Districts, Diversity, and Fiscal Biases: Evidence from the American States," Journal of Law and Economics, University of Chicago Press, vol. 42(2), pages 675-98, October.
- 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.
- Timothy J. Besley & Harvey S. Rosen, 1998.
"Sales Taxes and Prices: An Empirical Analysis,"
NBER Working Papers
6667, National Bureau of Economic Research, Inc.
- Baron, David P & Ferejohn, John, 1987. "Bargaining and Agenda Formation in Legislatures," American Economic Review, American Economic Association, vol. 77(2), pages 303-09, May.
- DelRossi, Alison F. & Inman, Robert P., 1999. "Changing the price of pork: the impact of local cost sharing on legislators' demands for distributive public goods," Journal of Public Economics, Elsevier, vol. 71(2), pages 247-273, February.
- Poterba, James M., 1996. "Retail Price Reactions to Changes in State and Local Sales Taxes," National Tax Journal, National Tax Association, vol. 49(2), pages 165-76, June.
- 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.
- Bradbury, John Charles & Crain, W. Mark, 2001. "Legislative organization and government spending: cross-country evidence," Journal of Public Economics, Elsevier, vol. 82(3), pages 309-325, December.
When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:88:y:2004:i:3-4:p:845-866. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If references are entirely missing, you can add them using this form.