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Factors That Influence the Level of Underground Government

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  • John Merrifield

    (University of Texas-San Antonio)

Abstract

Bennett and DiLorenzo have called the rapidly rising levels of off-budget spending "underground government," which they viewed as an end-run around voter-enacted limitations on spending, taxation, and debt. Marlow and Joulfaian argue that high levels of off-budget spending occur for the same reasons as high levels of on-budget spending. In this article, state data are used to develop two econometric models of off-budget spending. The models are used to test the hypotheses of Bennett and DiLorenzo, and Marlow and Joulfaian, and to develop new ones. Many of the significant variables have not been included in any previous models, and some of them have policy-making implications.

Suggested Citation

  • John Merrifield, 1994. "Factors That Influence the Level of Underground Government," Public Finance Review, , vol. 22(4), pages 462-482, October.
    • Handle: RePEc:sae:pubfin:v:22:y:1994:i:4:p:462-482
    DOI: 10.1177/109114219402200404
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    References listed on IDEAS

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    1. James Bennett & Thomas Dilorenzo, 1982. "Off-budget activities of local government: The bane of the tax revolt," Public Choice, Springer, vol. 39(3), pages 333-342, January.
    2. Bergstrom, Theodore C & Goodman, Robert P, 1973. "Private Demands for Public Goods," American Economic Review, American Economic Association, vol. 63(3), pages 280-296, June.
    3. Borcherding, Thomas E & Deacon, Robert T, 1972. "The Demand for the Services of Non-Federal Governments," American Economic Review, American Economic Association, vol. 62(5), pages 891-901, December.
    4. Walter KONECZNY, 1986. "Problems Relating To The Increasing Debt Of Off-Budget Public Corporations," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 57(3), pages 359-372, July.
    5. Robert Blewett, 1984. "Off-budget activities of local government: Comment," Public Choice, Springer, vol. 42(2), pages 205-211, January.
    6. Alm, James & Evers, Mark, 1991. "The Item Veto and State Government Expenditures," Public Choice, Springer, vol. 68(1-3), pages 1-15, January.
    7. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    8. Michael Marlow & David Joulfaian, 1989. "The determinants of off-budget activity of state and local governments," Public Choice, Springer, vol. 63(2), pages 113-123, November.
    9. William Baber & Pradyot Sen, 1986. "The political process and the use of debt financing by state governments," Public Choice, Springer, vol. 48(3), pages 201-215, January.
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    Cited by:

    1. Roberto Fernández Llera & María A. García Valiñas, 2010. "Efficiency and elusion: both sides of public enterprises in Spain," Working Papers 2010/5, Institut d'Economia de Barcelona (IEB).
    2. Roberto Fernández Llera & María A. García Valiñas, 2010. "Efficiency and elusion: both sides of public enterprises in Spain," Working Papers 2010/5, Institut d'Economia de Barcelona (IEB).

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