How can the power of Leviathans be measured?
In certain respects, it seems expedient to describe a government as a homogeneous and self-interested entity, called ’Leviathan’. To optimize fiscal constraints, we need to know how powerful a Leviathan really is. This paper presents a new approach to measure the power of Leviathans. This new approach defines fiscal power in terms of income deviation. It supposes that there exists a positive connection between fiscal power and intergovernmental grants. To examine the approach empirically, we use data on U.S. counties in the period 1999-2002. Equations of fiscal power are estimated on the full and on stratified samples. Overall, the results support the new approach. Nonetheless, further research on the highly significant control variables would be needed to derive recommendations for more efficient fiscal constraints.
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