How do local governments decide on public policy in fiscal federalism? Tax vs. expenditure optimization

Research output: Contribution to journal › Journal article › Research › peer-review

Standard

How do local governments decide on public policy in fiscal federalism? Tax vs. expenditure optimization. / Köthenbürger, Marko.

In: Journal of Public Economics, Vol. 95, No. 11-12, 2011, p. 1516-1522.

Research output: Contribution to journal › Journal article › Research › peer-review

Harvard

Köthenbürger, M 2011, 'How do local governments decide on public policy in fiscal federalism? Tax vs. expenditure optimization', Journal of Public Economics, vol. 95, no. 11-12, pp. 1516-1522. https://doi.org/10.1016/j.jpubeco.2011.06.006

APA

Köthenbürger, M. (2011). How do local governments decide on public policy in fiscal federalism? Tax vs. expenditure optimization. Journal of Public Economics, 95(11-12), 1516-1522. https://doi.org/10.1016/j.jpubeco.2011.06.006

Vancouver

Köthenbürger M. How do local governments decide on public policy in fiscal federalism? Tax vs. expenditure optimization. Journal of Public Economics. 2011;95(11-12):1516-1522. https://doi.org/10.1016/j.jpubeco.2011.06.006

Author

Köthenbürger, Marko. / How do local governments decide on public policy in fiscal federalism? Tax vs. expenditure optimization. In: Journal of Public Economics. 2011 ; Vol. 95, No. 11-12. pp. 1516-1522.

Bibtex

@article{b1c48b08f3234c47982584d64cdb1f27,
title = "How do local governments decide on public policy in fiscal federalism?: Tax vs. expenditure optimization",
abstract = "Previous literature widely assumes that taxes are optimized in local public finance while expenditures adjust residually. This paper endogenizes the choice of the optimization variable. In particular, it analyzes how federal policy toward local governments influences the way local governments decide on public policy. Unlike the usual presumption, the paper shows that local governments may choose to optimize over expenditures. The result holds when federal policy subsidizes local taxation. The results offer a new perspective of the efficiency implications of federal policy toward local governments and, thereby, enable a more precise characterization of local government behavior in fiscal federalism.",
keywords = "Faculty of Social Sciences, fiscal federalism, fiscal policy",
author = "Marko K{\"o}thenb{\"u}rger",
note = "JEL classification: H7; H3; H1",
year = "2011",
doi = "10.1016/j.jpubeco.2011.06.006",
language = "English",
volume = "95",
pages = "1516--1522",
journal = "Journal of Public Economics",
issn = "0047-2727",
publisher = "Elsevier",
number = "11-12",

}

RIS

TY - JOUR

T1 - How do local governments decide on public policy in fiscal federalism?

T2 - Tax vs. expenditure optimization

AU - Köthenbürger, Marko

N1 - JEL classification: H7; H3; H1

PY - 2011

Y1 - 2011

N2 - Previous literature widely assumes that taxes are optimized in local public finance while expenditures adjust residually. This paper endogenizes the choice of the optimization variable. In particular, it analyzes how federal policy toward local governments influences the way local governments decide on public policy. Unlike the usual presumption, the paper shows that local governments may choose to optimize over expenditures. The result holds when federal policy subsidizes local taxation. The results offer a new perspective of the efficiency implications of federal policy toward local governments and, thereby, enable a more precise characterization of local government behavior in fiscal federalism.

AB - Previous literature widely assumes that taxes are optimized in local public finance while expenditures adjust residually. This paper endogenizes the choice of the optimization variable. In particular, it analyzes how federal policy toward local governments influences the way local governments decide on public policy. Unlike the usual presumption, the paper shows that local governments may choose to optimize over expenditures. The result holds when federal policy subsidizes local taxation. The results offer a new perspective of the efficiency implications of federal policy toward local governments and, thereby, enable a more precise characterization of local government behavior in fiscal federalism.

KW - Faculty of Social Sciences

KW - fiscal federalism

KW - fiscal policy

U2 - 10.1016/j.jpubeco.2011.06.006

DO - 10.1016/j.jpubeco.2011.06.006

M3 - Journal article

VL - 95

SP - 1516

EP - 1522

JO - Journal of Public Economics

JF - Journal of Public Economics

SN - 0047-2727

IS - 11-12

ER -

ID: 36077817