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Government Form and Public Spending: Theory and Evidence from U.S. Municipalities

  • Stephen Coate
  • Brian Knight

There are two main forms of government in U.S. cities: council-manager and mayor-council. This paper develops a theory of fiscal policy determination under these two forms. The theory predicts that expected public spending will be lower under mayor-council, but that either form of government could be favored by a majority of citizens. The latter prediction means that the theory is consistent with the co-existence of both government forms. Support for the former prediction is found in both a cross-sectional analysis and a panel analysis of changes in government form.

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File URL: http://www.nber.org/papers/w14857.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14857.

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Date of creation: Apr 2009
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Publication status: published as Stephen Coate & Brian Knight, 2011. "Government Form and Public Spending: Theory and Evidence from US Municipalities," American Economic Journal: Economic Policy, American Economic Association, vol. 3(3), pages 82-112, August.
Handle: RePEc:nbr:nberwo:14857
Note: PE POL
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  1. Sass, Tim R, 1991. " The Choice of Municipal Government Structure and Public Expenditures," Public Choice, Springer, vol. 71(1-2), pages 71-87, August.
  2. Eric Maskin & Jean Tirole, 2004. "The Politician and the Judge: Accountability in Government," Economics Working Papers 0020, Institute for Advanced Study, School of Social Science.
  3. Torsten Persson & Guido Tabellini, 2006. "Democracy and Development: The Devil in the Details," Levine's Bibliography 122247000000001139, UCLA Department of Economics.
  4. Edwards, Linda N & Edwards, Franklin R, 1982. "Public Unions, Local Government Structure and the Compensation of Municipal Sanitation Workers," Economic Inquiry, Western Economic Association International, vol. 20(3), pages 405-25, July.
  5. Francesco Trebbi & Philippe Aghion & Alberto Alesina, 2008. "Electoral Rules and Minority Representation in U.S. Cities," The Quarterly Journal of Economics, MIT Press, vol. 123(1), pages 325-357, 02.
  6. Degan, Arianna & Merlo, Antonio, 2009. "Do voters vote ideologically?," Journal of Economic Theory, Elsevier, vol. 144(5), pages 1868-1894, September.
  7. Alberto Alesina & Guido Tabellini, 2007. "Bureaucrats or Politicians? Part I: A Single Policy Task," American Economic Review, American Economic Association, vol. 97(1), pages 169-179, March.
  8. Farnham, Paul G, 1990. " The Impact of Citizen Influence on Local Government Expenditure," Public Choice, Springer, vol. 64(3), pages 201-12, March.
  9. Reza Baqir, 2002. "Districting and Government Overspending," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1318-1354, December.
  10. Lynn MacDonald, 2008. "The impact of government structure on local public expenditures," Public Choice, Springer, vol. 136(3), pages 457-473, September.
  11. Persson, Torsten & Roland, Gérard & Tabellini, Guido, 1997. "Comparative Politics and Public Finance," CEPR Discussion Papers 1737, C.E.P.R. Discussion Papers.
  12. Stephen Coate & Timothy Besley, 2000. "Elected versus Appointed Regulators: Theory and Evidence," NBER Working Papers 7579, National Bureau of Economic Research, Inc.
  13. Ronald G. Ehrenberg, 1973. "Municipal government structure, unionization, and the wages of fire fighters," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 27(1), pages 36-48, October.
  14. Jonathan Levin & Steven Tadelis, 2007. "Contracting for Government Services: Theory and Evidence from U.S. Cities," NBER Working Papers 13350, National Bureau of Economic Research, Inc.
  15. Levitt, Steven D, 1996. "How Do Senators Vote? Disentangling the Role of Voter Preferences, Party Affiliation, and Senate Ideology," American Economic Review, American Economic Association, vol. 86(3), pages 425-41, June.
  16. Ehrenberg, Ronald G. & Goldstein, Gerald S., 1975. "A model of public sector wage determination," Journal of Urban Economics, Elsevier, vol. 2(3), pages 223-245, July.
  17. Persson, Torsten & Roland, Gerard & Tabellini, Guido, 1997. "Separation of Powers and Political Accountability," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1163-1202, November.
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