Bulletin n. 1/2005 | ||
December 2005 | ||
Revelli Federico |
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On Spatial Public Finance Empirics | ||
in International Tax and Public Finance , vol. 12, no 4 , 2005 , 475-492 | ||
This paper focuses on the empirical specification of theoretical models of strategic interaction that give rise to a spatial pattern in local government expenditures and revenues. It shows that estimation of a reduced form inter-jurisdictional reaction function might not by itself allow to discriminate among competing strategic interaction theories. A review of the recent empirical literature suggests that exploring in more depth the specific empirical implications of alternative theoretical models, as well as fully exploiting the institutional features of multi-tiered government structures and local electoral systems, can help identify the structural model generating the observed spatial auto-correlation in policy variables. | ||