Municipal Expenditures Research Articles

¿Cuánto cuesta la densificación? La relación entre la densidad y el costo de proveer servicios urbanos básicos en Brasil, Chile, Ecuador y México

The relationship between per capita municipal spending on basic urban services and urban population density is not a linear one. The optimal density level that minimizes spending in urban services is close to 9,000 inhabitants per square kilometer. In Brazil, Chile, Ecuador and Mexico, 85% of the municipalities find themselves below the ideal density level. The findings of this article suggest that policies that promote urbanization and densification of intermediate cities can have significant benefits in reducing municipal expenditures.

Examining the relationship between municipal consolidation and cost reduction: an instrumental variable approach

ABSTRACTThis study explores the cost-reduction effects of local government consolidation, using data from Japanese municipalities. We use municipal panel data from Japan for the years 2000, 2005 and 2010, a data set including numerous consolidation cases. Reverse causality between consolidation decisions and size of municipal expenditure is a concern in the voluntary consolidation of local governments. An instrumental variable (IV) methodology is employed to deal with possible endogeneity associated with consolidation decisions. The main finding is that municipal current expenditure per capita increases immediately after consolidation, but then gradually declines. Because consolidation seems to increase per capita expenditure in the absence of the effect of this long-term declining trend, incorporating this trend into estimation is crucial in cost-efficiency analysis of consolidation. It is also shown that conventional panel data regressions yield biased consolidation effects, suggesting the superiority of the IV approach.

A sizeable effect? Municipal council size and the cost of local government in Canada

AbstractThis article examines the relationship between council size and municipal expenditures in Quebec's largest municipalities. Two claims commonly found in the literature are tested: the professionalization and the law of 1/n hypotheses. Using cross‐sectional data, the professionalization hypothesis is confirmed: each elected official costs more in a smaller council. As for the law of 1/n, the effect of council size on total government expenditures is not significant. These results refute the cost saving argument for smaller councils and suggest that other aspects, such as quality of democratic life and efficiency in decision‐making, may be more relevant to the debate.

Gastos da Secretaria Municipal de Saúde com a Promoção da Assistência Farmacêutica: Vale do Ribeira

O presente trabalho tem como objetivo identificar os gastos municipais totais com medicamentos, correlacionando os gastos com assistência farmacêutica. A assistência farmacêutica tem merecido crescente atenção por parte de governantes, instituições e profissionais de todo o mundo tanto pelo aumento dos gastos com saúde quanto pela demanda que são crescentes, e os recursos que são finitos para garantir uma assistência integral à saúde dos cidadãos. O estudo em questão utilizou dados de fontes secundarias para o estudo das compras governamentais com o intuito principal de obter uma comparação entre os gastos municipais da mesma região. O gasto com medicamentos, em um contexto geral representa cerca de 30 a 40% do orçamento em saúde. As indicações encontradas por este trabalho sugerem que os gastos no programa de Assistência Farmacêutica cujas aquisições são de competência do Ministério da Saúde e centralizadas na União, apresentaram aumento expressivo, entre 2010 a 2015. Analisou-se preliminarmente a dimensão de gastos, e não a eficácia nesses programas.

The impact of municipal budgets and land-use management on the hazardous waste production of Malaga municipalities

Economic development and the search for competitiveness have become key issues in regions' economic success. However, despite the direct relationship between economic and environmental management, few land-use plans consider the latter aspect, and city managers delegate the responsibility for environmental impacts to state legislation and private initiatives. This myopic search for competitiveness has meant that a holistic view of environmental issues is often not integrated into municipal decision-making processes. Therefore, this study's objective was to determine the relevant direct and indirect relationships of land management and budgetary procedures of municipalities with overall production levels of hazardous waste. To this end, a primary tourist region, Málaga, was examined in terms of how this waste's environmental impacts can affect the region's vital tourism sector. This research used principal component analysis, regression by ordinary least squares, cluster analysis in two stages and a means test to compare the data for the Province of Malaga's subregions.The results confirm a positive relationship between municipal expenditure and waste production and highlight the environmental benefits of land use involving environmentally non-aggressive crops. The results also reveal a negative relationship between waste production and financial assets and a direct relationship between unproductive land and the production of hazardous waste. The findings also highlight the necessity of raising awareness about the need for collaboration between different agents, especially in the development of inter-municipal strategies.

Discussing the spatial dependence and the determinants of the municipal expenses of Portuguese forest sappers’ teams

Abstract 2 The costs of forest sappers’ teams are discussed in this work, using the present Portuguese model as a case study. The teams’ actions and expenses between 2000 and 2015 have been observed, and several hypotheses for the distribution of the shares of municipal expenditures on these brigades are discussed. Using spatial autocorrelation models, spatial autoregressive models, spatial Durbin models, and spatial error models, several original results have been achieved. A positive spatial autocorrelation in the shares of these municipal expenditures has been observed for the first time in the literature, revealing a mimetic approach among Portuguese municipalities that implies the need for re-arranging the current programs and regulations related to forest sappers’ teams towards an enlarged space of action.

Serviço de Atendimento Móvel de Urgência (SAMU) do Estado da Bahia: subfinanciamento e desigualdade regional

Resumo Introdução A implantação do Serviço de Atendimento Móvel de Urgência (SAMU), com a definição do seu financiamento para investimento e custeio, representou um importante avanço para o Sistema Único de Saúde, tendo em vista o quadro de morbimortalidade relacionado às urgências no Brasil. Métodos A pesquisa tomou como base de coleta o Sistema de Informações sobre Orçamentos Públicos em Saúde. Os dados foram analisados com o auxílio do método das Contas Nacionais de Saúde. Resultados A participação do SAMU no bloco de financiamento federal da Média e Alta Complexidade (MAC) saiu de 3,27% em 2009 para 6,67% em 2012, atingindo R$ 200 milhões no Estado. O aumento de 110%, no período, ocorreu mesmo com o crescimento irrisório dos aportes da MAC. Metade das regiões de saúde não apresentou registros de repasse financeiro específico, indicando distribuição desigual desse importante serviço. O gasto municipal per capita variou entre R$103,04 e R$5,47, concentrando maiores valores em municípios de pequeno porte, diferença não justificável do ponto de vista do custo da oferta. Conclusão Subfinanciamento e desigualdades regionais reclamam reajustes distributivos e avaliação contínua, de modo a evitar que populações fiquem sem acesso à proteção garantida pela Política Nacional de Atenção às Urgências.

Beyond Density: Municipal Expenditures and the Shape and Location of Development

Sprawling development patterns are often accused of increasing traffic congestion and pollution, decreasing employment accessibility, increasing social isolation and racial segregation, and increasing the cost of providing municipal services. This last effect is the focus of the analysis presented here. A clear understanding of the relationship between development patterns and municipal expenditures is complicated by how one chooses to quantify these patterns. Extant literature often employs a single density measure to capture the low-density nature of sprawl. While density provides an intuitive link to economies of scale and congestion costs, it fails to capture other spatial characteristics of sprawl related to centrality, connectedness, and mixed use that may influence municipal expenditures according to Smart Growth and New Urbanism advocates. This study uses Massachusetts orthoimagery data to construct multidimensional measures of residential and commercial land use patterns. Municipal expenditures associated with public works, fire, and police are regressed on multidimensional measures of land use as well as a number of demand controls. Findings indicate that economies and diseconomies do exist with respect to the multidimensional metrics considered; however, support is mixed for development patterns emphasized by Smart Growth and New Urbanism advocates.

The Impact of the Economic Crisis on Czech Municipal Expenditures

The paper focuses on the links between municipal expenditures and the economic crisis (or the economic cycle). The aim is to improve the predictions of municipal expenditures: current expenditures, capital expenditures and total expenditures. Current research shows that the predictions in times of economic growth are relatively good, but in times of economic crisis, models fail. The focus of this paper is the context of the business cycle in order to implement these macroeconomic contexts into predictive models. The tool for achieving this goal is to find strong connections, including time shifts.

Do the data on municipal expenditures in the Czech Republic imply incorrectness in their management?

Do the data on municipal expenditures in the Czech Republic imply incorrectness in their management?

Merger Myths: A Functional Analysis of Scale Economies in New South Wales Local Government

Structural reform through municipal mergers is ubiquitous across the developed world and Australian local government is no exception. Advocates of council consolidation, including the New South Wales (NSW) Government in its current amalgamation program, frequently contend that larger local government entities will generate cost savings through scale economies, despite the fact that different municipal functions exhibit a wide range of production characteristics. in the NSW case, no empirical evidence has been presented in support of the claim that amalgamation will induce greater economies of scale. in order to examine this claim empirically, we undertook a functional municipal expenditure analysis for NSW using 2014 data. Our results cast considerable doubt on the scale economies claim made by the NSW Government.

Direct Democracy and Local Public Finances under Cooperative Federalism

AbstractIn this paper, we exploit the introduction of the right of local initiatives in the German state of Bavaria in 1995 in order to study the fiscal effects of direct democracy. Our identification strategy combines difference‐in‐differences and regression discontinuity methods: we compare municipal expenditure and revenue between pre‐ and post‐reform periods at population thresholds where the signatures needed to launch initiatives and minimum quorum requirements decrease discontinuously (difference‐in‐discontinuities design). The results suggest that stronger direct democratic institutions lead to an expansion of local government size.

Exploring active transportation investments and associated benefits for municipal budgets: a scoping review

ABSTRACTMunicipalities play an important role in the planning and development of communities that support active transportation (AT), which refers to human-powered modes of travel, such as walking and cycling. Municipal-level stakeholders involved in land-use and transportation infrastructure planning consider multiple social, environmental and economic considerations to inform decision-making and investments in AT. Evidence around the fiscal benefits of AT investment for local governments has not been systematically identified. This scoping review sought to explore the existing evidence regarding investments in AT and opportunities for savings on municipal expenditures and revenue generation. In total, 7060 records were located and screened; of which 162 full-text articles were reviewed. Ultimately, 23 articles met our inclusion criteria and were included in this review. The available evidence focuses on potential economic benefits of AT in the areas of tax revenues, property values, consumer spending and employment, all of which are relevant sources of revenue generation in municipal operating budgets. An evidence gap was identified regarding AT infrastructure investments and benefits corresponding to municipal expenditures (e.g. maintenance cost savings). Notably, a large portion of literature was published after 2009, suggesting that municipal-level evidence on the fiscal benefits of AT investments may just be emerging.

К вопросу о месте бюджетных расходов в системе финансового права

The article is devoted to the determination of place of the norms regulating budgetary costs of the system of financial law, which has important theoretical and practical significant. The author emphasizes the need for a systematic approach in addressing the issue of the construction of an effective mechanism for legal regulation of budget expenditures. Various points of view on the place of institute of budget expenditures in the system of financial law, expressed in the Soviet and modern science of financial law, are analyzed. It is proposed to include the state and municipal revenues, state and municipal expenditures, state and municipal loans in the special part of the financial law. Budget Law is considered as a complex sub-sector of financial law. The article concludes that the norms regulating the budgetary costs are included in the sub-sector of financial law “state and local expenditures” as also are the part of the complex sub-sector of financial law “budget law”.

The Effectiveness and Potential Unintended Consequences of Caps on Municipal Taxation and Expenditures

In this paper, I examine how municipalities are affected by tax and expenditure limitations (TELs). The main goals of TELs are to reduce the property tax burden of local residents and reduce the size of government. I find that these goals are generally met in the short run, however expenditures do not seem to be reduced over the long term. I also examine a potential unintended consequence of TELs, a shift in the balance of service and administrative expenditures. I find signs that municipalities may increase service expenditures just before TEL implementation, followed by significant reductions just after. This study also finds that over the long term, service ratio is significantly lower for municipalities operating under tax and expenditure limitations.

Frammentazione comunale e spesa pubblica: una proposta di aggregazione sui sistemi locali del lavoro

Representing the needs of local communities and providing them with daily public services are the main tasks of municipalities and the way they affect both the residents’ quality of life and the firms’ competitiveness. Institutional hyper-fragmentation, however, imposes high costs to the whole system, multiplying the operating costs, which divert resources away from the services’ financing. Unlike other studies, this work does not aim to identify an optimal size for local governments, but rather to simulate the cost savings applying a more realistic territorial organization, based on daily commuting areas (Local Labour Systems by Istat). The paper assumes the administrative expenses and those for government bodies as a measure for operating costs, analyzes their components and determinants, estimating two different functions of municipal expenditure and simulates the possible saving, applying both an average need requirement and a minimum need requirement criterion.

Compatibility of municipal services based on service similarity

The aim of this article is to propose and examine a quantitative method of determining the degree of compatibility between municipal services. Provision of services and facilities maintenance are usually two biggest expenditures of local governments. Traditionally, facilities host only one service, whereas the challenge and opportunity lies in combining various, compatible services and offering them together under one roof. Such a combination decreases municipal expenditure and has a strong positive impact on the general service quality. For this purpose, we take advantage of the City-block distance formula to calculate the degree of compatibility between municipal services. The method is examined and discussed on a sample of 30 real municipal services. This allows us to find possible combinations of strongly compatible services that should be offered together in Multi-Service Facilities and, at the same time, avoid an unwanted combination of services that are incompatible.

Political Business Cycle in the Czech Republic: Case of Municipalities

The study analyses expenditures of all municipalities of the Czech Republic over the period 2003-2013. It aims to examine whether changes in municipal spending get affected by the electoral cycle. The analysis has proven that expenditures of municipalities of the Czech Republic are influenced by the political cycle. However, the political business cycle has at the level of municipalities (compared to the macroeconomic level) its peculiarities. These arise mainly from limited options of municipal politicians to use economic instruments to win electoral votes in elections. To receive electoral votes, municipal politicians use mainly public investments and projects that are at the level of municipalities so apparent that they may influence voters in their electoral decision-making. Prior to elections, expenditures on investments significantly increase for all municipal size groups. For municipal size groups of over 50,000 residents, however, they are (per capita) higher compared to smaller municipal size groups. This may be explained by the fact that these municipalities have higher disposable resources (higher per capita own budgetary revenues, higher potential to acquire resources to co-finance municipal projects and broader portfolio of debt financing). Expenditures on transfers do not significantly change prior to municipal elections. We interpret this finding in a way that politicians prefer such investment projects that are visible. Transfers are used to pay for certain current expenses for which municipalities may (in accordance with the established rules) apply through grants.

Voters prefer more qualified mayors, but does it matter for public finances? Evidence for Germany

This paper studies the importance of politicians’ qualification, in terms of education and experience, for fiscal outcomes. The analysis is based on a large panel for 2031 German municipalities for which we have collected information on municipal budgets as well as the election results and qualification levels of mayoral candidates. We principally use a regression discontinuity design focusing on close elections to estimate causal effects. We find that mayors with prior experience in office have a tendency to reduce the level of local public debt, lower total municipal expenditures and decrease the local taxes, even though these results are only significant in some specifications. In contrast, the education level of the mayor exerts no significant effects on the overall fiscal performance of the municipality. The results are partly surprising as both education and experience are shown to matter greatly in the electoral success of mayoral candidates.

Voters Prefer More Qualified Mayors, But Does It Matter for Public Finances? Evidence for Germany

This paper studies the importance of politician's qualification, in terms of education and experience, for fiscal outcomes. The analysis is based on a large panel for 2,031 German municipalities for which we have collected information on municipal budgets as well as the election results and qualification levels of mayoral candidates. We principally use a Regression Discontinuity Design focusing on close elections to estimate causal effects. We find that mayors with prior experience in office indeed tend to reduce the level of local public debt, lower total municipal expenditures and decrease the local taxes. In contrast, the education level of the mayor exerts no significant effects on the overall fiscal performance of the municipality. The results are partly surprising as both education and experience are shown to matter greatly in the electoral success of mayoral candidates.