The Intertemporal Spending Behavior of Local Governments: A Comparative Analysis of the Scandinavian Countries

Lars-Erik Borge, Matz Dahlberg () and Per Tovmo
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Per Tovmo: Department of Economics, Postal: Norwegian University of Science and Technology, N-7491 Trondheim, Norway

No 2001:10, Working Paper Series from Uppsala University, Department of Economics

Abstract: The paper investigates the intertemporal spending behavior of Scandinavian local governments with particular attention to liquidity constraints imposed by balanced-budget-rules and other regulations. The main finding is that Danish local governments are more able to smooth current expenditures than their Norwegian and Swedish counterparts. Whereas the permanent-income hypothesis cannot be rejected for Denmark, it is in most cases rejected for Norway and Sweden. The Swedish system of market-based control and the Norwegian system of administrative control seem to produce similar results in terms of consumption smoothing.

Keywords: Local government consumption; Intertemporal decision-making (search for similar items in EconPapers)
JEL-codes: D99 H72 (search for similar items in EconPapers)
Date: 2001-04-09
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Working Paper: The Intertemporal Spending Behavior of Local Governments: A Comparative Analysis of the Scandinavian Countries (2001)
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