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Does Competition Tame the Leviathan? A Case of Earmarked Spending for Transportation

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  • Jongmin Shon

    (Soongsil University)

Abstract

Extant studies have explored the Leviathan hypothesis whether competition across governments enhances efficiency. This study empirically estimates the Leviathan hypothesis in the context of earmarked spending on transportation and competition in California. This study first obtains an efficiency score for empirical procedures employing the Malmquist productivity index and further the Tobit regression model to examine the Leviathan hypothesis. The findings provide evidence that competition of local (option) sales tax improves efficiency in transportation spending. The findings verify that efficiency becomes lower in a county that levies local (option) sales tax earmarked for transportation because transportation spending increases.

Suggested Citation

  • Jongmin Shon, 2022. "Does Competition Tame the Leviathan? A Case of Earmarked Spending for Transportation," Hacienda Pública Española / Review of Public Economics, IEF, vol. 241(2), pages 59-78, June.
    • Handle: RePEc:hpe:journl:y:2022:v:241:i:2:p:59-78
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    More about this item

    Keywords

    Leviathan hypothesis; Efficiency of earmarked spending; Local (option) sales tax.;
    All these keywords.

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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