Copycatting: Fiscal Policies Of States And Their Neighbors
This paper formalizes and tests the notion that state governments' expenditures depend on the spending of similarly situated states. We find that even after allowing for fixed state effects, year effects, and common random effects between neighbors, as state government's level of per capita expenditure is positively and significantly affected by the expenditure levels of its neighbors. Ceteris paribus, a one dollar increase in a state's neighbors' expenditures increases its own expenditure by over 70 cents.
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|Date of creation:||1989|
|Date of revision:|
|Contact details of provider:|| Postal: PRINCETON UNIVERSITY, WOODROW WILSON SCHOOL OF PUBLIC AND INTERNATIONAL AFFAIRS, DEPARTMENT OF ECONOMICS, PRINCETON NEW-JERSEY 08542 U.S.A.|
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- Steven G. Craig & Robert P. Inman, 1985.
"Education, Welfare, and the "New" Federalism: State Budgeting in a Federalist Public Economy,"
NBER Working Papers
1562, National Bureau of Economic Research, Inc.
- Steven Craig & Robert P. Inman, 1986. "Education, Welfare and the "New" Federalism: State Budgeting in a Federalist Public Economy," NBER Chapters, in: Studies in State and Local Public Finance, pages 187-228 National Bureau of Economic Research, Inc.
- Gramlich, Edward M & Rubinfeld, Daniel L, 1982. "Micro Estimates of Public Spending Demand Functions and Tests of the Tiebout and Median-Voter Hypotheses," Journal of Political Economy, University of Chicago Press, vol. 90(3), pages 536-60, June.
- J. Richard Aronson & James R. Marsden, 1980. "Duplicating Moody's Municipal Credit Ratings," Public Finance Review, , vol. 8(1), pages 97-106, January.
- Edward M. Gramlich & Deborah S. Laren, 1984. "Migration and Income Redistribution Responsibilities," Journal of Human Resources, University of Wisconsin Press, vol. 19(4), pages 489-511.
- Dennis Mueller & Peter Murrell, 1986. "Interest groups and the size of government," Public Choice, Springer, vol. 48(2), pages 125-145, January.
- Johnson, William R, 1988. "Income Redistribution in a Federal System," American Economic Review, American Economic Association, vol. 78(3), pages 570-73, June.
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