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Convergence in Local Government Spending: Evidence from Wisconsin

Author

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  • Deller, Steven

    (U of Wisconsin)

  • Skidmore, Mark

    (U of Wisconsin, Whitewater)

Abstract

A substantial body of theoretical and empirical evidence demonstrates that interregional competition for factors of production leads to convergence of per capita output. Is there an analogous process that leads to convergence of public sector activity? Skidmore, et al (2004) develop a model that is consistent with the macroeconomic growth literature, which predicts convergence in government spending. Based on this framework, we test for convergence in government spending using detailed data from Wisconsin for a variety of municipal government expenditure categories over the 1989/90-1999/2000 period. Our empirical investigation provides compelling evidence of convergence in capita government spending for all the expenditure categories we study. This work adds to the growing body of evidence demonstrating the existence of underlying dynamic forces that determine growth of government.

Suggested Citation

  • Deller, Steven & Skidmore, Mark, 2005. "Convergence in Local Government Spending: Evidence from Wisconsin," Staff Paper Series 483, University of Wisconsin, Agricultural and Applied Economics.
  • Handle: RePEc:ecl:wisagr:483
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    File URL: http://www.aae.wisc.edu/pubs/sps/pdf/stpap483.pdf
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    References listed on IDEAS

    as
    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    2. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    3. Steven C. Deller & Tsung-Hsiu (Sue) Tsai & David W. Marcouiller & Donald B.K. English, 2001. "The Role of Amenities and Quality of Life In Rural Economic Growth," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 352-365.
    4. Mark Skidmore & Hideki Toya & David Merriman, 2004. "Convergence in Government Spending: Theory and Cross-Country Evidence," Kyklos, Wiley Blackwell, vol. 57(4), pages 587-620, November.
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    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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