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On Spatial Public Finance Empirics

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  • Federico Revelli

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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  • Federico Revelli, 2005. "On Spatial Public Finance Empirics," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(4), pages 475-492, August.
  • Handle: RePEc:kap:itaxpf:v:12:y:2005:i:4:p:475-492
    DOI: 10.1007/s10797-005-4199-9
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