Abstract
AbstractThis paper presents a model of fiscal federalism where state and local officials jointly fund a local public good that produces regional externalities. The model examines the implications of diverging budgetary priorities at the state and local level for the sustainability of cooperative funding arrangements. Local government dependence on intergovernmental aid is shown to negatively affect the likelihood of receiving state bailouts. Additionally, the termination of joint funding agreements is predicted to precede increased government fragmentation through the formation of new special purpose districts. The analysis is illustrated using flood control infrastructure finance and school district fragmentation.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
