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On Spatial Public Finance Empirics

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  • Federico Revelli

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Abstract

This paper focuses on the empirical specification of theoretical models of strategic interaction that give rise to a spatial pattern in local government expenditures and revenues. It shows that estimation of a reduced form inter-jurisdictional reaction function might not by itself allow to discriminate among competing strategic interaction theories. A review of the recent empirical literature suggests that exploring in more depth the specific empirical implications of alternative theoretical models, as well as fully exploiting the institutional features of multi-tiered government structures and local electoral systems, can help identify the structural model generating the observed spatial auto-correlation in policy variables. Copyright Springer Science + Business Media, Inc. 2005

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File URL: http://hdl.handle.net/10.1007/s10797-005-4199-9
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Article provided by Springer & International Institute of Public Finance in its journal International Tax and Public Finance.

Volume (Year): 12 (2005)
Issue (Month): 4 (August)
Pages: 475-492

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Handle: RePEc:kap:itaxpf:v:12:y:2005:i:4:p:475-492
DOI: 10.1007/s10797-005-4199-9
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Keywords: fiscal externalities; expenditure spill-over; tax competition; yardstick competition;

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