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Government Form and Performance: Fiscal Illusion and Administrative Ability in U.S. Counties

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  • Geoffrey K. Turnbull

Abstract

Key differences in local government organizational form lie in separation of powers versus unified powers and elected versus professional chief executive officers (CEOs). This paper studies how these features lead to differences in fiscal illusion and production cost. Evidence from U.S. counties indicates that there is less fiscal illusion under separation of powers, which by itself reduces spending. Separation of powers, however, leads to greater overall spending when compared with unified governments. The inelastic public demand, therefore, implies that separation of powers leads to services being provided at greater cost than under governments with unified powers. Similar conclusions hold for professional relative to elected CEOs.

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  • Geoffrey K. Turnbull, 2007. "Government Form and Performance: Fiscal Illusion and Administrative Ability in U.S. Counties," Southern Economic Journal, John Wiley & Sons, vol. 73(3), pages 754-769, January.
    • Handle: RePEc:wly:soecon:v:73:y:2007:i:3:p:754-769
    DOI: 10.1002/j.2325-8012.2007.tb00800.x
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    References listed on IDEAS

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    1. Geoffrey K. Turnbull & Chinkun Chang, 1998. "The Median Voter According to GARP," Southern Economic Journal, John Wiley & Sons, vol. 64(4), pages 1001-1010, April.
    2. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922.
    3. Chang, Chinkun & Turnbull, Geoffrey K, 2002. "Bureaucratic Behavior in the Local Public Sector: A Revealed Preference Approach," Public Choice, Springer, vol. 113(1-2), pages 191-210, October.
    4. Werner W. Pommerehne & Bruno S. Frey, 1976. "Two Approaches To Estimating Public Expenditures," Public Finance Review, , vol. 4(4), pages 395-407, October.
    5. Richard Wagner, 1976. "Revenue structure, fiscal illusion, and budgetary choice," Public Choice, Springer, vol. 25(1), pages 45-61, March.
    6. Pommerehne, Werner W., 1978. "Institutional approaches to public expenditure : Empirical evidence from Swiss municipalities," Journal of Public Economics, Elsevier, vol. 9(2), pages 255-280, April.
    7. Turnbull, Geoffrey K & Djoundourian, Salpie S, 1994. "The Median Voter Hypothesis: Evidence from General Purpose Local Governments," Public Choice, Springer, vol. 81(3-4), pages 223-240, December.
    8. Turnbull, Geoffrey K., 1998. "The Overspending and Flypaper Effects of Fiscal Illusion: Theory and Empirical Evidence," Journal of Urban Economics, Elsevier, vol. 44(1), pages 1-26, July.
    9. Grosskopf Shawna & Hayes Kathy, 1993. "Local Public Sector Bureaucrats and Their Input Choices," Journal of Urban Economics, Elsevier, vol. 33(2), pages 151-166, March.
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