EXPLAINING GAPS IN INFRASTRUCTURE INVESTMENT BY MUNICIPAL GOVERNMENTS IN AUSTRALIA

Phil Simmons and Brian Dollery ()
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Phil Simmons: School of Business, University of New England, Armidale, Australia

The Singapore Economic Review (SER), 2023, vol. 68, issue 02, 457-466

Abstract: Shortfalls in infrastructure expenditure represent a ubiquitous problem in all Australian local government systems as well as in many other countries. In this paper, we use an evolutionary model to describe how local government investment decisions are made. We demonstrate that fear of reputational damage among elected councilors could cause herding behavior resulting in convergent and overly cautious investment behavior by councils. Under these conditions, divergent viewpoints amongst council members are discouraged and local government may become moribund in its decision-making. We show how this may result in “gaps†in infrastructure investment.

Keywords: Local government; infrastructure; herding behavior (search for similar items in EconPapers)
JEL-codes: D72 D80 H70 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:wsi:serxxx:v:68:y:2023:i:02:n:s0217590819500024

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DOI: 10.1142/S0217590819500024

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