Competition for Private Capital and Central Grants: The Case of Japanese Industrial Parks

Bessho, Shun-ichiro () and Kimiko Terai ()
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Bessho, Shun-ichiro: Department of Economics, Hitotsubashi University
Kimiko Terai: Hosei University

No 80909, Working Papers from University of California-Irvine, Department of Economics

Abstract: We construct a simple model of fiscal competition taking `rent-seeking' behavior of local governments into account and estimate a policy reaction function based on the model. We consider the scale of public input as each local government's policy tool. Local autonomies' method of seeking central grants often takes the form of personnel exchange with central government. Our estimation of the policy reaction function suggests that such personnel exchange has an effect on the development of industrial parks.

Keywords: Business area development; Policy competition; Rent-seeking, Spatial model (search for similar items in EconPapers)
JEL-codes: H11 H54 H76 H77 R53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-pbe and nep-ure
Date: 2008-09
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Persistent link: http://EconPapers.repec.org/RePEc:irv:wpaper:080909

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