Expenditure Competition / Roger H. Gordon, John D. Wilson.

Format:

Book

Author/Creator:

Gordon, Roger H.

Contributor:

National Bureau of Economic Research.

Wilson, John D.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8189.

NBER working paper series no. w8189

Language:

English

Subjects (All):

Decentralization in government.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2001.

Cambridge, Massachussetts : National Bureau of Economic Research, [2001]

Summary:

Given the temptation on government officials to use some of their budget for 'perks,' residents face the problem of inducing officials to reduce such 'waste.' The threat to vote out of office officials who perform poorly is one possible response. In this paper, we explore the effect that competition for residents induced by fiscal decentralization has on 'waste' in government. We find not only that such competition reduces waste and raises the utility of residents, but also that it should increase the desired level of public expenditures, and to a point above the level that jurisdictions would choose if they could coordinate. These results are in sharp contrast to the presumed effects from such 'tax competition,' and suggest an additional advantage of fiscal decentralization.

Notes:

Print version record

March 2001.