Local Public Goods, Debt and Migration

Christian Schultz () and Tomas Sjostrom

Working Papers from Pennsylvania State - Department of Economics

Abstract: Migration raises a potential free rider problem for the provision of durable local public goods if the late-comers can enjoy the public good without paying for it. Allowing communities to finance public goods by debt mitigates this problem, since future immigrants have to share the burden of the debt. However, in equilibrium there will be over-accumulation of local debt. There may be more or less public good than in first best, but conditional on the inefficiently high levels of debt there will be too few public goods. A competitive market for land reduces but does not in general eliminate the inefficiencies.

Keywords: MIGRATION; PUBLIC GOODS; DEBT (search for similar items in EconPapers)
JEL-codes: H41 H71 H74 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2000
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Citations: View citations in EconPapers (1)

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Journal Article: Local public goods, debt and migration (2001)
Working Paper: Local Public Goods, Debt and Migration
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Persistent link: https://EconPapers.repec.org/RePEc:fth:pensta:6-00-1

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