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Who is fitting better to Portuguese local demand for public choice: Central government or municipal governments?

  • Cruz, Jose Manuel


Using two alternative approaches to the demand for public choice - median voter and interest group competition - central government and local governments public provision to Portuguese municipalities were analysed. Two political issues under the responsability of municipal governments (current intervention and environmental resources management) were compared with two issues that depend on central government decisions (basic healthcare and undergraduate education). Empirical results show that the response of public choice to political demand is quite similar whatever is the responsible level of government. This easy-communicability between central government provision and local demand reveals some ability of central government in apprehending local specifities. However this does not imply that central government provision shall continue, because empirical results indicate that local groups are succeeded in lobbying central government. Setting up the studied case of local provision as reference, if decentralization occurs, the destruction of nationally organized lobbying will not strongly reinforce local interest group pressure. Consequently, at a national perspective, decentralization may bring public choice closer to the preferences of majority.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa02p440.

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Date of creation: Aug 2002
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Handle: RePEc:wiw:wiwrsa:ersa02p440
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  1. Turnbull, Geoffrey K & Djoundourian, Salpie S, 1994. " The Median Voter Hypothesis: Evidence from General Purpose Local Governments," Public Choice, Springer, vol. 81(3-4), pages 223-40, December.
  2. van Winden, Frans, 1999. " On the Economic Theory of Interest Groups: Towards a Group Frame of Reference in Political Economics," Public Choice, Springer, vol. 100(1-2), pages 1-29, July.
  3. Pommerehne, Werner & Frey, Bruno S., 1975. "Two approaches to estimating public expenditures," Discussion Papers, Series I 65, University of Konstanz, Department of Economics.
  4. Davidson, Russell & MacKinnon, James G, 1981. "Several Tests for Model Specification in the Presence of Alternative Hypotheses," Econometrica, Econometric Society, vol. 49(3), pages 781-93, May.
  5. Congleton, Roger D & Bennett, Randall W, 1995. " On the Political Economy of State Highway Expenditures: Some Evidence of the Relative Performance of Alternative Public Choice Models," Public Choice, Springer, vol. 84(1-2), pages 1-24, July.
  6. Randall Holcombe, 1989. "The median voter model in public choice theory," Public Choice, Springer, vol. 61(2), pages 115-125, May.
  7. Potters, Jan & Sloof, Randolph, 1996. "Interest groups: A survey of empirical models that try to assess their influence," European Journal of Political Economy, Elsevier, vol. 12(3), pages 403-442, November.
  8. Borcherding, Thomas E & Deacon, Robert T, 1972. "The Demand for the Services of Non-Federal Governments," American Economic Review, American Economic Association, vol. 62(5), pages 891-901, December.
  9. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
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