On the effects of factor mobility on local infrastructure policy and rent-seeking

Oliver Lorz

No 850, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This paper deals with the influence of factor mobility on local infrastructure policy and rent-seeking activities of local interest groups. It employs a model where households differ with respect to their endowment with the immobile factor land. Local governments decide about the level of productive infrastructure in their jurisdiction. According to their land endowment, different households benefit to a different degree from the infrastructure. This redistribution effect of local infrastructure gives households an incentive for rent-seeking: Landabundant households seek to influence their government to increase the level of infrastructure whereas land-poor households seek to influence their government to reduce the infrastructure level. As this paper shows, factor mobility and fiscal competition between local governments lead to increasing rent-seeking expenditures for a broad class of cases.

Keywords: Factor Mobility; Fiscal Competition; Rent-Seeking (search for similar items in EconPapers)
JEL-codes: D72 H41 H72 (search for similar items in EconPapers)
Date: 1998
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/47122/1/258173009.pdf (application/pdf)

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:zbw:ifwkwp:850

Access Statistics for this paper

More papers in Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().