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Measuring fiscal interactions in local federalism: Evidence from Florida

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  • Kevin Willardsen
Abstract
Local governments react to one another in expenditure. However, the existing literature concerning these reactions suffer from one of three problems: timing dynamics, county behaviour, or over aggregation. City‐to‐city interaction estimates are shown to shrink up to 50% when appropriately dealing with dynamics and county behaviour using a dynamic spatial Durbin model with a maximum likelihood estimator. Expenditure disaggregation shows that the majority of categories have no spillover. One category, general government expenditure, is responsible for nearly all of the variation. This finding does not fit well with the existing theories for spatial interaction. Los gobiernos locales reaccionan entre sí con respecto al gasto. Sin embargo, la bibliografía existente sobre estas reacciones adolece de uno de estos tres problemas: la dinámica temporal, el comportamiento del condado o la sobreagregación. Se demuestra que las estimaciones de la interacción entre ciudades se reducen hasta un 50% cuando la dinámica y el comportamiento de los condados se tratan adecuadamente mediante el empleo de un modelo espacial dinámico de Durbin con un estimador de máxima verosimilitud. El desglose de los gastos muestra que la mayoría de las categorías no tienen efectos de spillover. Una categoría, la de los gastos de las administraciones públicas, es responsable de casi toda la variación. Este hallazgo no se ajusta bien a las teorías existentes sobre la interacción espacial. 地方自治体は支出に関して相互に反応する。しかし、この反応に関する既存研究は、タイミングの動態、郡の挙動、または過剰凝集のうちのいずれかの問題が障害となっている。都市間相互作用推定値は、最尤推定法を用いた動的空間Durbinモデルを用いて動態と郡の挙動を適切に処理すると、50%まで縮小することを示した。支出の内訳からは、大半の項目には波及効果がないことが示される。項目の1つである一般政府支出は、ほとんどすべての変動に関与している。この知見は、空間的相互作用に関する既存の理論とは一致しないものである。

Suggested Citation

  • Kevin Willardsen, 2021. "Measuring fiscal interactions in local federalism: Evidence from Florida," Papers in Regional Science, Wiley Blackwell, vol. 100(4), pages 891-923, August.
    • Handle: RePEc:bla:presci:v:100:y:2021:i:4:p:891-923
    DOI: 10.1111/pirs.12600
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    References listed on IDEAS

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    1. Cong Yu & Linke Hou & Yuxia Lyu & Qi Zhang, 2022. "Political competition, spatial interactions, and default risk of local government debts in China," Papers in Regional Science, Wiley Blackwell, vol. 101(3), pages 717-743, June.

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