EconPapers    
Economics at your fingertips  
 

Local government co-financing of the central government's transport infrastructure investment

Johanna Jussila Hammes and Svante Mandell ()

Economics of Transportation, 2019, vol. 18, issue C, 40-49

Abstract: We study two districts’ voluntary co-financing of a centrally provided public good, e.g., transport infrastructure. Outcomes are compared to a surplus-maximizing level of public good provision. We show that both co-financing and lobbying raise the amount of public good provided. Co-financing and lobbying are substitutes. Co-financing (or co-financing combined with lobbying) raises the provision of the public good to a higher level than lobbying alone. Co-financing can thus reduce rent-seeking. Finally, we show that under uncertainty about district type (high or low benefit), co-financing combined with lobbying can be used to find and retain a separating equilibrium.

Keywords: Co-financing; Fiscal federalism; Lobbying; Rent-seeking; Separating equilibrium (search for similar items in EconPapers)
JEL-codes: D8 H2 H4 H7 R5 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S221201221830056X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecotra:v:18:y:2019:i:c:p:40-49

DOI: 10.1016/j.ecotra.2019.03.001

Access Statistics for this article

Economics of Transportation is currently edited by Mogens Fosgerau and Erik Verhoef

More articles in Economics of Transportation from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2021-09-11
Handle: RePEc:eee:ecotra:v:18:y:2019:i:c:p:40-49