IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v33y2005i3p343-384.html
   My bibliography  Save this article

On the Relationship between Authority Size and the Costs of Providing Local Services: Lessons for the Design of Intergovernmental Transfers in Spain

Author

Listed:
  • Albert Solé-Ollé

    (Universitat de Barcelona and IEB (Institut d’Economia de Barcelona))

  • Núria Bosch

    (Universitat de Barcelona and IEB (Institut d’Economia de Barcelona))

Abstract

Unconditional transfers to local governments in Spain are distributed mainly according to weighted population, with weights rising with population size to account for the higher expenditure responsibilities and needs of bigger municipalities. The authors evaluate the appropriateness of these weights and estimate an expenditure equation with a data set covering more than 2,500 Spanish municipalities in 1999, and the use of a piecewise linear function accounts for the possible nonlinear relationship between costs and population size. The results identify important scale economies for the smallest local authorities and growing per capita costs for higher population sizes. However, the growth in per capita costs is much lower than the one implicit in the weights used in the distribution of transfers.

Suggested Citation

  • Albert Solé-Ollé & Núria Bosch, 2005. "On the Relationship between Authority Size and the Costs of Providing Local Services: Lessons for the Design of Intergovernmental Transfers in Spain," Public Finance Review, , vol. 33(3), pages 343-384, May.
  • Handle: RePEc:sae:pubfin:v:33:y:2005:i:3:p:343-384
    as

    Download full text from publisher

    File URL: http://pfr.sagepub.com/content/33/3/343.abstract
    Download Restriction: no

    References listed on IDEAS

    as
    1. Mitchell, Olivia S, 1988. "Worker Knowledge of Pension Provisions," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 21-39, January.
    2. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
    3. Hubbard, R Glenn & Skinner, Jonathan & Zeldes, Stephen P, 1995. "Precautionary Saving and Social Insurance," Journal of Political Economy, University of Chicago Press, vol. 103(2), pages 360-399, April.
    4. Neumark, David & Powers, Elizabeth, 2000. "Welfare for the elderly: the effects of SSI on pre-retirement labor supply," Journal of Public Economics, Elsevier, pages 51-80.
    5. Daniel, K., 1991. "Does Marriage Make Men More Productive?," University of Chicago - Economics Research Center 92-2, Chicago - Economics Research Center.
    6. Sanders Korenman & David Neumark, 1991. "Does Marriage Really Make Men More Productive?," Journal of Human Resources, University of Wisconsin Press, vol. 26(2), pages 282-307.
    7. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1105-1166, December.
    8. Neumark, David & Powers, Elizabeth, 1998. "The effect of means-tested income support for the elderly on pre-retirement saving: evidence from the SSI program in the U.S," Journal of Public Economics, Elsevier, vol. 68(2), pages 181-206, May.
    9. Elizabeth T. Powers & David Neumark, 2003. "The Supplemental Security Income Program and Incentives to Claim Social Security Retirement Early: Empirical Evidence from Matched SIPP and Social Security Administrative Files," Working Papers wp036, University of Michigan, Michigan Retirement Research Center.
    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. Solé-Ollé, Albert & Sorribas-Navarro, Pilar, 2008. "The effects of partisan alignment on the allocation of intergovernmental transfers. Differences-in-differences estimates for Spain," Journal of Public Economics, Elsevier, vol. 92(12), pages 2302-2319, December.
    2. Sole-Olle, Albert, 2006. "Expenditure spillovers and fiscal interactions: Empirical evidence from local governments in Spain," Journal of Urban Economics, Elsevier, vol. 59(1), pages 32-53, January.
    3. J.A. Bikker & D.E. van der Linde, 2015. "The Optimum Size of Local Public Administration," Working Papers 15-05, Utrecht School of Economics.
    4. Luiz de Mello & Santiago Lago-Pe-as, 2013. "Local government cooperation for joint provision: the experiences of Brazil and Spain with inter-municipal consortia," Chapters,in: The Challenge of Local Government Size, chapter 9, pages 221-241 Edward Elgar Publishing.
    5. Dino Rizzi & Michele Zanette, 2015. "A Procedure for the Ex-Ante Assessment of Compulsory Municipal Amalgamation Programs," Working Papers 2015:22, Department of Economics, University of Venice "Ca' Foscari".
    6. Albert Solé-Ollé & Pilar Sorribas-Navarro, 2012. "The dynamic adjustment of local government budgets: does Spain behave differently?," Applied Economics, Taylor & Francis Journals, vol. 44(25), pages 3203-3213, September.
    7. Dirk Foremny & Jordi Jofre-Monseny & Albert Solé-Ollé, 2015. "'Hold that Ghost': Using Notches to Identify Manipulation of Population-Based Grants," CESifo Working Paper Series 5578, CESifo Group Munich.
    8. Luiz de Mello & Santiago Lago-Pe-as, 2013. "Local government cooperation for joint provision: the experiences of Brazil and Spain with inter-municipal consortia," Chapters,in: The Challenge of Local Government Size, chapter 9, pages 221-241 Edward Elgar Publishing.
    9. repec:spr:chfecr:v:4:y:2015:i:1:d:10.1186_s40589-016-0026-y is not listed on IDEAS
    10. Nuria Boch Roca & Marta Espasa & Daniel Montolio, 2014. "Should Large Spanish Municipalities Be Financially Compensated? Costs and Benefits of Being a Capital/Central Municipality," Hacienda Pública Española, IEF, pages 67-91.
    11. repec:eee:pubeco:v:154:y:2017:i:c:p:49-66 is not listed on IDEAS
    12. Foremny, Dirk & Solé-Ollé, Albert, 2016. "Who's coming to the rescue? Revenue-sharing slumps and implicit bailouts during the Great Recession," ZEW Discussion Papers 16-049, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    13. Reingewertz, Yaniv, 2014. "Fiscal Decentralization - a Survey of the Empirical Literature," MPRA Paper 59889, University Library of Munich, Germany.
    14. Jordi Jofre-Monseny & Pilar Sorribas-Navarro & Javier Vázquez-Grenno, 2016. "Immigration and local spending in social services: evidence from a massive immigration wave," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(6), pages 1004-1029, December.
    15. Reingewertz, Yaniv, 2012. "Do municipal amalgamations work? Evidence from municipalities in Israel," Journal of Urban Economics, Elsevier, vol. 72(2), pages 240-251.
    16. Buettner, Thiess & Holm-Hadulla, Fédéric, 2013. "City size and the demand for local public goods," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 16-21.

    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:pubfin:v:33:y:2005:i:3:p:343-384. See general information about how to correct material in RePEc.

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

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.