Business Political Influence on Municipal Budgets

David D Arsen

American Journal of Economics and Sociology, 1991, vol. 50, issue 4, 431-451

Abstract: Abstract Past empirical studies of local government fiscal performance have made extensive use of the median voter model Despite its analytical advantages, the model proceeds from a highly simplified conception of politics in which business firms play no direct role An alternative model is developed which permits statistical tests for business political influence on municipal budgeting and the estimation of local residents’net fiscal benefit from firms Firms’fiscal impact varies widely across municipalities, often entailing a negative net effect on residents Variations in these impacts indicate not only the presence of business influence but also permit tests of alternative hypotheses of interest group politics The data used dealt with eighty‐six San Francisco Bay area cities

Date: 1991
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