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Zum Problem räumlicher Nutzen-Spillover zentralörtlicher Leistungen. Einige empirische Ergebnisse aus dem Schweizer Föderalismus / Inter-jurisdictional Spillover Effects from Central Public Infrastructure. Evidence from the Swiss Federalism

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  • Schaltegger Christoph A.

    () (Universität Basel, WWZ, Petersgraben 51, CH-4003 Basel)

Abstract

The theory of fiscal federalism considers inter-jurisdictional spillover effects as a serious problem for an efficient decentralized fiscal policy. If one jurisdiction provides public goods which inhabitants of another jurisdiction can benefit from without contributing to the costs, the latter jurisdiction can free ride on the provided public goods and consequently reduce its own public spending and tax burden. In this case its inhabitants use public services without adequately sharing the costs to provide them. Such urban externalities stimulate a flight of the tax base to suburban areas and consequently lead to an under-provision with central services. This paper investigates the empirical relevance of inter-jurisdictional spillover effects in the Swiss federalism. The Swiss federalism is highly fragmented, the sub-federal jurisdictions have considerable tax power and the economic potential of the jurisdictions is very diverse. Thus, the Swiss federalism represents a useful laboratory to investigate spillover effects. The results show that spillover effects between Swiss cantons play a minor role. They are significant only in public welfare and finance spending. In all other spending categories spillover effects cannot be observed, eventually challenging political arguments for an amalgamation of jurisdictions in order to internalize the externalities.

Suggested Citation

  • Schaltegger Christoph A., 2003. "Zum Problem räumlicher Nutzen-Spillover zentralörtlicher Leistungen. Einige empirische Ergebnisse aus dem Schweizer Föderalismus / Inter-jurisdictional Spillover Effects from Central Public Infrastruc," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 223(2), pages 159-175, April.
  • Handle: RePEc:jns:jbstat:v:223:y:2003:i:2:p:159-175
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    References listed on IDEAS

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