Asymmetric Interdependence in the Provision of a Local Public Good: An Empirical Examination

Finney, Miles; Yoon, Mann J.

doi:10.1177/1091142103254572

Cited by 3 publications

(8 citation statements)

References 15 publications

(22 reference statements)

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“…For example, the benefit of rescue service decreases with distance since turnout time is a critical factor (Hanes 2002). If residents move to the municipality of origin to consume benefits like library services (Finney and Yoon 2003), a longer distance increases transportation costs, discouraging their consumption. Second, proximity should also matter for the resource-flow model.…”

Section: Models Of Fiscal Competition and Geographical Proximitymentioning

confidence: 99%

“…Case et al (1993) propose constructing W with Wij = 1/|Qi  Qj|, where Q is a relevant socio-economic variable. Typically, studies utilize the following variables for Q: (i) per capita income (Case et al 1993, Boarnet and Glazer 2002, Finney and Yoon 2003, Baicker 2005, Caldeira 2012), (ii) population (Case et al 1993, Rincke 2010), (iii) racial composition (Case et al 1993, Boarnet andGlazer 2002), (iv) migration and commuting (Figlio et al 1999, Baicker 2005, Rincke 2010, and (v) partisan affiliation (Foucault et al 2008).…”

Section: Demarcation Of Neighborhoods and The Fits-m System In Japanmentioning

confidence: 99%

“…However, such cases approximate the benefit-spillover model, not the model of yardstick competition. Furthermore, they concern specific public services such as rescue (Hanes 2002), libraries (Finney and Yoon 2003), and cultural services (Lundgerg 2006, Akai and Suhara 2013).…”

Section: Slope Of the Reaction Functionmentioning

confidence: 99%

“…180181) for the resource-flow model. Using a specific form of benefit spillover, some studies associate the negative sign of  with free-riding behavior of local governments(Murdoch et al 1993, Finney and Yoon 2003, Akai and Suhara 2013. However, in the presence of a general form of benefit spillover, we cannot generally determine the sign of the slope of the reaction function.…”

mentioning

confidence: 99%

“…The general form of the ID is the "distance decay" function specified as Wij = 1/dij  , where  is some positive parameter(Murdock et al 1993, Finney and Yoon 2003, Baicker 2005, Foucault et al 2008, Caldeira 2012, Akai and Suhara 2013, Costa et al 2015. Evidently, our ID assumes that  = 1.…”

mentioning

confidence: 99%

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Information sharing, neighborhood demarcation, and yardstick competition: an empirical analysis of intergovernmental expenditure interaction in Japan

Hayashi

Yamamoto

2016

Int Tax Public Finance

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The Japanese government provides information on local fiscal performance through the Fiscal Index Tables for Similar Municipalities (FITS-M). The FITS-M categorize municipalities into groups of "similar localities" and provide them with the fiscal indices of their group members, enabling municipalities to use the tables to identify their "neighbors" (i.e., those in the same FITS-M group) and refer to their fiscal information as a "yardstick" for fiscal planning. We take advantage of this system to estimate municipal spending function. In particular, we examine if the FITS-M help identify a defensible spatial weights matrix that properly describes municipal spending interactions. Our analysis shows that they do. In particular, geographical proximity is significant only between a pair of municipalities within a given FITS-M group, and it does not affect competition between pairs belonging to different groups even if they are located close to each other. This would suggest that the FITS-M work as intended, indicating that spending interaction among Japanese municipalities originates from yardstick competition and not from other types of fiscal competition.

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Section: Models Of Fiscal Competition and Geographical Proximitymentioning

confidence: 99%

Section: Demarcation Of Neighborhoods and The Fits-m System In Japanmentioning

confidence: 99%

Section: Slope Of the Reaction Functionmentioning

confidence: 99%

mentioning

confidence: 99%

mentioning

confidence: 99%

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Information sharing, neighborhood demarcation, and yardstick competition: an empirical analysis of intergovernmental expenditure interaction in Japan

Hayashi

Yamamoto

2016

Int Tax Public Finance

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Do municipal mergers internalise spatial spillover effects? empirical evidence from Japanese municipalities

et al. 2022

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This study investigates whether municipal mergers could internalise spatial spillover effects by comparing mergers before and after they occur, focusing on local public library services in Japan. A spatial spillover effect occurs when the benefit of a local public service spreads across its own administrative district and into neighbouring ones. A free-rider problem among municipalities might arise when a municipality decides how much to supply internally under a decentralisation system, recognising the existence of spatial spillover effects. Under such circumstances, spatial spillover effects might be internalised through municipal mergers. In Japan, large-scale municipal mergers took place in FY2004 and FY2005 and the number of municipalities decreased from 3,232 to 1,820. By applying cross-sectional spatial econometrics models, we find spatial spillover effects in public library services both before and after the mergers, but the impact becomes smaller. The results imply that municipal mergers could partially internalise spatial spillover effects among municipalities. Additionally, we showed that municipal mergers increase the supply of library services. As a result, due to the merger of municipalities, the undersupply of local public goods with spatial spillover effect may be decreased, which could help achieve the socially optimal supply.

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A Simultaneous Equations Model of Fiscal Policy Interactions*

Allers

Elhorst

2011

Journal of Regional Science

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Existing studies of fiscal policy interactions are based on single equation models of either taxation or expenditures, without specifying the underlying social welfare function, without taking account of budget constraints and without allowing for cost differences between jurisdictions. Taking all this into account, we derive an extended version of the linear expenditure system (LES) with policy interaction effects. We use this system to simultaneously estimate interactions in both taxation and different spending categories among Dutch municipalities. Our interaction parameters tend to be higher than those estimated using conventional single equation models.JEL classification: C31, H71, H72

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Asymmetric Interdependence in the Provision of a Local Public Good: An Empirical Examination

Cited by 3 publications

References 15 publications

Information sharing, neighborhood demarcation, and yardstick competition: an empirical analysis of intergovernmental expenditure interaction in Japan

Information sharing, neighborhood demarcation, and yardstick competition: an empirical analysis of intergovernmental expenditure interaction in Japan

Do municipal mergers internalise spatial spillover effects? empirical evidence from Japanese municipalities

A Simultaneous Equations Model of Fiscal Policy Interactions*

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