Government Form and Public Spending: Theory and Evidence from U.S. Municipalities

Stephen Coate () and Brian G. Knight

No 14857, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: There are two main forms of government in U.S. cities: council-manager and mayor-council. This paper develops a theory of fiscal policy determination under these two forms. The theory predicts that expected public spending will be lower under mayor-council, but that either form of government could be favored by a majority of citizens. The latter prediction means that the theory is consistent with the co-existence of both government forms. Support for the former prediction is found in both a cross-sectional analysis and a panel analysis of changes in government form.

JEL-codes: D7 H7 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-pbe and nep-ure
Date: 2009-04
Note: PE POL
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