IDEAS home Printed from https://ideas.repec.org/a/sae/envirc/v12y1994i2p213-224.html
   My bibliography  Save this article

Central Regulation of Local Government Borrowing: A Game-Theoretical Approach

Author

Listed:
  • F Carlsen

    (Department of Economics, University of Trondheim, 7055 Dragvoll, Norway)

Abstract

In this paper the author considers whether central authorities should regulate local sector borrowing. Local government's debt policy is modeled as the outcome of a two-period game between three agents: Central government, local government, and a bureau which produces services on behalf of local government. A key assumption of the model is that neither central nor local government is able to undertake long-term budget commitments. Two rationales are found for central regulations. First, local government is prevented from using deficits strategically to extract higher grants from central authorities. Second, the debt limit gives credibility to local government's budget policy towards the bureau.

Suggested Citation

  • F Carlsen, 1994. "Central Regulation of Local Government Borrowing: A Game-Theoretical Approach," Environment and Planning C, , vol. 12(2), pages 213-224, June.
    • Handle: RePEc:sae:envirc:v:12:y:1994:i:2:p:213-224
    DOI: 10.1068/c120213
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1068/c120213
    Download Restriction: no
    File URL: https://libkey.io/10.1068/c120213?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bunch, Beverly S, 1991. "The Effect of Constitutional Debt Limits on Stage Governments' Use of Public Authorities," Public Choice, Springer, vol. 68(1-3), pages 57-69, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fredrik Carlsen, 1998. "Central Regulation of Local Authorities," Public Finance Review, , vol. 26(4), pages 304-326, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Poterba, James M, 1996. "Budget Institutions and Fiscal Policy in the U.S. States," American Economic Review, American Economic Association, vol. 86(2), pages 395-400, May.
    2. Heiko T. Burret & Lars P. Feld, 2014. "A Note on Budget Rules and Fiscal Federalism," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(01), pages 03-11, April.
    3. Fermín Cabasés & Pedro Pascual & Jaime Vallés, 2007. "The effectiveness of institutional borrowing restrictions: Empirical evidence from Spanish municipalities," Public Choice, Springer, vol. 131(3), pages 293-313, June.
    4. Timothy C. Irwin, 2015. "Defining The Government'S Debt And Deficit," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 711-732, September.
    5. Marco Buti & João Nogueira Martins & Alessandro Turrini, 2007. "From Deficits to Debt and Back: Political Incentives under Numerical Fiscal Rules," CESifo Economic Studies, CESifo Group, vol. 53(1), pages 115-152, March.
    6. Todd L. Ely & Thad D. Calabrese, 2017. "Public Borrowing for Private Organizations: Costs and Structure of Tax-Exempt Debt Through Conduit Issuers," Public Budgeting & Finance, Wiley Blackwell, vol. 37(1), pages 3-25, March.
    7. von Hagen, Jurgen & Wolff, Guntram B., 2006. "What do deficits tell us about debt? Empirical evidence on creative accounting with fiscal rules in the EU," Journal of Banking & Finance, Elsevier, vol. 30(12), pages 3259-3279, December.
    8. Poterba, James M., 1995. "Capital budgets, borrowing rules, and state capital spending," Journal of Public Economics, Elsevier, vol. 56(2), pages 165-187, February.
    9. Robert A. Greer, 2015. "Overlapping Local Government Debt and the Fiscal Common," Public Finance Review, , vol. 43(6), pages 762-785, November.
    10. Fisayo Fagbemi, 2020. "Assessing the Role of Governance in West African Fiscal Performance," The American Economist, Sage Publications, vol. 65(1), pages 97-122, March.
    11. Sorensen, Bent E. & Wu, Lisa & Yosha, Oved, 2001. "Output fluctuations and fiscal policy: U.S. state and local governments 1978-1994," European Economic Review, Elsevier, vol. 45(7), pages 1271-1310.
    12. Hallerberg, Mark & Wolff, Guntram B., 2006. "Fiscal institutions, fiscal policy and sovereign risk premia," Discussion Paper Series 1: Economic Studies 2006,35, Deutsche Bundesbank.
    13. Heiko T. Burret & Lars P. Feld, 2016. "Effects of Fiscal Rules - 85 Years' Experience in Switzerland," CESifo Working Paper Series 6063, CESifo.
    14. repec:ces:ifodic:v:12:y:2014:i:1:p:19108838 is not listed on IDEAS
    15. Lang Yang, 2019. "The impact of state intervention and bankruptcy authorization laws on local government deficits," Economics of Governance, Springer, vol. 20(4), pages 305-328, December.
    16. Christopher B Goodman, 2018. "Usage of Specialized Service Delivery: Evidence from Contiguous Counties," Publius: The Journal of Federalism, CSF Associates Inc., vol. 48(4), pages 686-708.
    17. Wen Wang & Bo Zhao, 2017. "Transparency in state debt disclosure," Working Papers 17-10, Federal Reserve Bank of Boston.
    18. Kerstin Bernoth & Guntram B. Wolff, 2008. "Fool The Markets? Creative Accounting, Fiscal Transparency And Sovereign Risk Premia," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(4), pages 465-487, September.
    19. Milesi-Ferretti, Gian Maria, 2004. "Good, bad or ugly? On the effects of fiscal rules with creative accounting," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 377-394, January.
    20. Goodman, Christopher B & Leland, Suzanne M., 2017. "Do Cities and Counties Attempt to Circumvent Changes in their Autonomy by Creating Special Districts?," SocArXiv 3rd7v, Center for Open Science.
    21. Burret, Heiko T. & Feld, Lars P., 2018. "(Un-)intended effects of fiscal rules," European Journal of Political Economy, Elsevier, vol. 52(C), pages 166-191.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:envirc:v:12:y:1994:i:2:p:213-224. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.