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Spatial Interdependence of Local Public Expenditures: Selected Evidence from the Czech Republic

Local expenditures in neighbouring municipalities can be spatially interdependent due to spillovers, cooperation effects, competition effects or mimicking. In this paper, we aim to test the spatial interdependence of local public expenditures using data on 205 Czech municipalities. We found positive spatial interdependence in expenditures on housing and culture and negative spatial interdependence for expenditures on industry and infrastructure and environmental protection. Additionally, we observed that political characteristics affect the size of spending; left-wing parties tend to increase expenditures on culture and decrease expenditures on industry and infrastructure; and higher party fragmentation decreases overall capital expenditures and expenditures on housing.

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Paper provided by Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies in its series Working Papers IES with number 2009/12.

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Length: 17 pages
Date of creation: Mar 2009
Date of revision: Mar 2009
Handle: RePEc:fau:wpaper:wp2009_12
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