us regionalism and rationality regionalism continues to be proffered as a policy prescription for us metropolitan ills while many urban scholars discuss the benefits of regional approaches to problem solving others question and sometimes dismiss the possibility of widespread comprehensive regionalism this latter group generally takes one of two perspectives first they argue that local autonomy and fragmentation prohibit regional collaboration secondly rational choice theorists claim jurisdiction centred economic interest spurs intraregional competition and impedes cooperation although both perspectives can be criticised as overdeterministic they appear to be supported by the limited number of examples of comprehensive metropolitan co operation in the us this article identifies a theoretical connection and empirical similarity between these views of impediments to regionalism the author argues that strategies suggested by rational based collective action theory apply to either the autonomy or competition argument however

is there a leviathan in your neighborhood this paper measures effects of decentralization in local government hierarchies on local public sector size this sector shrinks if decentralization encourages competition among governments it expands if decentralization sacrifices scale economies in a sample of 3 022 counties larger county governments reduce competition and increase aggregate local public sector size relative to aggregate county income more cities and towns increase competition and reduce its size more special and school districts sacrifice scale economies and increase it two recent articles have attempted to identify the effects of decentralization in state and local government on the size of the state and local public sector wallace oates 1985 finds no important effects michael nelson 1987 finds modest evidence that increased competition among government units reduces the size of the public sector this article demonstrates that the effects of decentralization are important and complex decentralization which encourages competition reduces the size of the local public sector decentralization which discourages scale economies increases it

basic research and productivity increase in manufacturing additional evi dence in a recent paper in this review edwin mansfield illustrated empirically using a sample of ten petroleum and six chemical firms that firm rates of productivity change are related to the amount of companyfinanced basic research performed certeris paribus in this note additional evidence is presented which is supportive of mansfield s findings this analysis is based on a sample of fifty one major manufacturing firms active in r d it is unique in that the impacts of company financeda nd governmentfinancedb asic researche xpendituresa re consideredd eterminantso f productivityg rowth the following model was estimated

does tax competition tame the leviathan abstract we study the impact of tax competition on equilibrium taxes and welfare focusing on the jurisdictional fragmentation of federations in a representative agent model of fiscal federalism fragmentation among jurisdictions with benevolent tax setting authorities unambiguously reduces welfare if however tax setting authorities pursue revenue maximization fragmentation by pushing down equilibrium tax rates may under certain conditions increase citizen welfare we exploit the highly decentralized and heterogeneous swiss fiscal system as a laboratory for the estimation of these effects while for purely direct democratic jurisdictions which we associate with relatively benevolent tax setting we find that tax rates increase in fragmentation fragmentation has a moderating effect on the tax rates of jurisdictions with some degree of delegated government our results thereby support the view that tax competition can be second best welfare improving by constraining the scope for public sector revenue maximization

local intergovernmental competition and the law of 1 n this article proposes an empirical framework based on a synthesis of the seminal law of 1 n and leviathan theories which models the relationship between government spending and the number of jurisdictions in a federal system as determined by the interplay of the costs related to centralized government which fall as the number of jurisdictions increases and the costs of distributive politics which rise as the number of jurisdictions increases using a panel of u s state and local government spending data empirical tests based on this combined framework show that the effect of intergovernmental competition predicted by the leviathan model is partially offset by the law of 1 n this result helps explain the inconsistent findings in the previous empirical literature

is public r d a complement or substitute for private r d a review of the econometric evidence is public r d spending complementary and thus additional to private r d spending or does it substitute for and tend to crowd out private r d conflicting answers are given to this question we survey the body of available econometric evidence accumulated over the past 35 years a framework for analysis of the problem is developed to help organize and summarize the findings of econometric studies based on time series and cross section data from various levels of aggregation laboratory firm industry country the findings overall are ambivalent and the existing literature as a whole is subject to the criticism that the nature of the experiment s that the investigators envisage is not adequately specified we conclude by offering suggestions for improving future empirical research on this issue

the leviathan lottery testing the revenue maximization objective of state lotteries as evidence for leviathan unlike other governmental units statelottery agencies publicly acknowledge thattheir primary objective is revenuemaximization this claim and the inherentmonopoly power of lottery agencies providesa unique arena to test for leviathan withdata obtained from united states lotterygames i perform a laffer curve analysis toderive the optimal lottery tax rates fordifferent categories of games theseoptimal tax rates and monte carlosimulations are then used to test whetherthe current tax structure of lottery gamesis indeed the revenue maximizing structure i find strong empirical evidence for the leviathan lottery

welfare improving competition for mobile capital abstract this paper constructs a model in which regions provide firms with a public input financed by taxes that residents choose to levy on capital and wage income self interested government officials face incentives to provide the public input because its positive impact on labor and capital productivity leads to larger tax bases the positive relation between tax revenue and the public input is strengthened if capital is mobile across regions government officials engage in expenditure competition leaving residents better off than they would be in the absence of capital mobility to further enhance public sector incentives residents may choose to tax capital income at a positive rate although investment is discouraged

deciding to provide local decisions on providing social welfare fiscal federalism predicts local governments will avoid social welfare expenditures owing to capital mobility across local jurisdictions yet census of governments data consistently show that many local governments provide one or more social welfare functions and moreover many jurisdictions provide these functions without federal or state intergovernmental support this article finds evidence that while local expenditures are largely driven by fiscal capacity and federal and state assistance local decisions on providing social welfare functions and participating in intergovernmental revenues are primarily affected by degree of capital mobility and by local political factors consequently local governments exercise much greater autonomy over social welfare policymaking than fiscal federalism suggests

decentralized taxation and the size of government evidence from swiss state and local governments according to the leviathan model fiscal federalism is seen as a binding constraint on a revenue maximizing government the competitive pressure of fiscal federalism is supposed to reduce public sector size as compared to unitary states however empirical results concerning the leviathan hypothesis are mixed this study uses a state and local level panel data set of swiss cantons from 1980 to 1998 to empirically analyze the effect of different federalist institutions on the size and structure of government revenue because of the considerable tax autonomy of sub national swiss governments it is possible to investigate different mechanisms by which fiscal federalism may influence government size the results indicate that tax exporting has a revenue expanding effect whereas tax competition favors a smaller size of government fragmentation has essentially no effect on the size of government revenue for swiss cantons the overall effect of revenue decentralization leads to fewer tax revenue but higher user charges thus revenue decentralization favors a smaller size of government revenue and shifts government revenue from taxes to user charges

the size of the state economic growth and the efficient utilization of national resources the motives of the state in projecting a more than minimal presence in the economy may be conceived of as benevolent or malevolent whatever the characterization of the motivation increases in the size of the government share of the economy adversely affect economic growth and the allocation of resources nations with relatively large government shares in 1960 on the whole grew more slowly than nations with relatively small state sectors interperiod increases in the size of government were associated with lower growth rates over the period the size of the government share coefficients in the regressions were of sufficiently large magnitude to conclude that the rise in the size of the government has had a substantial depressing effect on economic growth these results are consistent with those reported by landau 1983 and marlow 1986 landau did not adjust economic growth for the growth in factor endowment consequently his results overstate the adverse effect of government size

the decline in the number of school districts in the u s 1950 1980 between 1950 and 1980 the number of school districts fell from 83 642 to 15 987 data for the fifty states for 1950 1960 1970 and 1980 are used to identify the factors that contributed to this decline the focus is on the tradeoff between cost savings through scale economies a few large districts and a diverse population s demand for choice in public schooling many small districts we find that much of the decline in the number of school districts has resulted from 1 the decline in the farm population and increase in population density which has made it easier to take advantage of scale economies 2 the growing importance of state aid which reduces quality variation among districts within a state and 3 the increase in the fraction of teachers that belong to the national education association teacher s union which may reflect increased political influence used to lower the costs of organizing

leviathan in the crosshairs following in the spirit of the leviathan hypothesis this paper empirically examines how the degree of local government market power influences efficiency in the local public sector market power is measured by the number and relative size distribution of similar government units in the same market area to avoid confusing market power with the comparative efficiency or superiority of larger sized organizations the relative size distribution of the individual government unit is held constant in the empirical analysis in the empirical test aggregate property values serve as the measure of efficiency the empirical results suggest that aggregate property values are lower and thus efficiency suffers in more concentrated municipal market areas ceteris paribus thus providing some evidence for leviathan type governments in connecticut

the impact of r d investment on productivity new evidence using linked r d lrd data the impact of r d investment on productivity new evidence using linked r d lrd data this paper uses confidential census longitudinal microdata to examine the association between r d and productivity for the period 1972 1985 these data allow for significant improvements in measurement and model specification yielding more precise estimates of the returns to r d our results confirm the findings of existing studies 1 positive returns to r d investment 2 higher returns to company financed research 3 a productivity premium on basic research these results are robust to adjustments for influential outliers also our evidence suggests that the return to company financed r d is an increasing function of firm size i introduction robert solow s studies in the late 1950s dramatically changed perceptions of the sources of economic growth until this time the commonly held view was that improvements in economic welfare were achieved primarily through the use of more inputs in particular capital input however solow 1957 reported that only 10 percent of the twofold rise in u s per capita output during the years 1909 1949 was due to growth in the capital labor ratio the remainder was attributed to more efficient use of inputs or technological change solow also established a framework for estimating technological change a productivity residual or a measure of changes in output that could not be explained by changes in input use the solow residual in modified form has become virtually synonymous with the measurement of total factor productivity tfp growth jorgenson and griliches 1967 demonstrated that under the assumptions of constant returns to scale and competitive factor pricing changes in total factor productivity measure shifts in a production function rather than treat technological change as exogenous or manna from heaven many economists have explored its determinants r d investment is generally regarded as having a strong impact on productivity growth empirical analysis of the r d productivity connection has often been based on estimation of reduced form equations derived from the r d capital stock model griliches 1979 which extends the solow model to include the stock of technical knowledge or knowledge capital as a factor of production in addition to the standard factors of production physical capital labor intermediate materials and energy if the rate of depreciation of knowledge capital is assumed to be negligible tfp growth dtfp is a function of the intensity of r d investment rdint which is usually measured as the ratio of r d expenditure to sales 1 dtf p sub t alpha beta rdin t sub t u sub t where u sub t is a classical disturbance term the coefficient on r d intensity beta is interpreted as both the marginal product of knowledge capital and the rate of return to r d investment 1 estimates of beta at the company or line of business level are interpreted as measures of the private rate of return to r d or those that accrue to the firm or its investors due to incomplete appropriability or other factors this return may not equal the social return to this activity most empirical studies especially those based on aggregate and sectoral data have found evidence of a strong positive correlation between tfp growth and r d investment however results using firm level data have been mixed the finding that these two variables are uncorrelated is cause for concern because it implies that firms may not be able to earn significant returns on their investment in r d making them less likely to undertake this investment in the future even if it is socially desirable for them to do so we believe that it is important to reestimate this relationship because it is highly likely that existing firm level studies have been based on measures of tfp that are crude imprecise and unrepresentative

state mandates and interest group lobbying abstract we apply becker s 1983 model of political interest groups to state mandates on public expenditures and revenues of local governments we outline conditions under which interest groups increase localities output levels above the efficient level but political pressure at the state level will reduce spending toward the efficient level an implication of our model is that political lobbying at the local level occurs only because of its indirect effects on state mandated outcomes because the state ultimately decides the government service level interest groups payoffs to lobbying at the state level generally will exceed those at the local level

a positive model of tax structure the model of tax structure developed in this paper is one in which the composition of revenues and the structure of specific taxes arise naturally as the result of self interested political behavior it is assumed that political agents choose tax structure so as to minimize the political costs or expected net loss in votes associated with raising a budget of given size several hypotheses concerning the nature of political cost functions are developed and applied to an explanation of the differences among u s states in their reliance on income taxation the empirical application emphasizes differences in political constraints across jurisdictions in the belief that much can be learned about the choice of policy instruments by studying structural adjustments in response to varying constraints the paper discusses how the proposed approach differs from or is consistent with that adopted by other authors and how the estimating equation relates to other empirical research in the literature

federalism and the growth of government revisited recent research in public economics has been testing for a relationship in federal states between the decentralization of governments and the total and individual size of government shares in gnp according to one view economic theory offers no unambiguous empirical predictions provided there is a competitive political environment at each government level the rivalry between political parties will result in an outcome that conforms approximately to the preferences of the citizens as interpreted in the conventional median voter model under this scenario it is not certain what differences might be caused by more decentralization oates 1985 to determine any difference we would have to possess considerable knowledge about the distribution of tastes and the location of the populace it has been hypothesized nevertheless that increased decentralization could result in a higher level of government expenditure quoting the economic historian john wallis oates 1985 749 suggests that since individuals have more control over public decisions at the local than at the state or national level they will wish to empower the public sector with a wider range of functions and responsibility where these activities are carried out at more localizedlevels of government

involuntary unemployment and non compensating wage differentials in an experimental labour market in this paper the authors report the results of a series of efficiency wage experiments some of the key predictions of the efficiency wage hypothesis are qualitatively confirmed by the data higher wages caused a reduction in shirking firms offered contracts which exhibited positive job rents firms offered systematically different wages and job rents which gave rise to noncompensating income differentials and endogenous involuntary unemployment occurred copyright 1996 by royal economic society

the private r d investment response to federal design and technical competitions it is the federal government s role to promote investment in research and development rd and 2 contracting with private firms and nonprofit organizations such as universities to perform rd the winning firm recovered its development costs in the form of profits on the sale of the airplanes and the losing firms did not recoup their r d investment mansfield 1971 p 122

how does fiscal decentralization affect aggregate national and subnational government size abstract beyond conducting the usual regression analysis of the relationship between fiscal decentralization and aggregate government size national and subnational combined this paper makes the first attempt to examine how different fiscal decentralization measures affect the sizes of national and subnational state and local combined governments an econometric analysis using panel data from 32 industrial and developing countries 1980 1994 finds that 1 expenditure decentralization leads to smaller national governments larger subnational governments and larger aggregate governments 2 revenue decentralization increases subnational governments by less than it reduces national governments hence leads to smaller aggregate governments and 3 vertical imbalance tends to increase the sizes of subnational national and aggregate governments

public education supply and student performance this paper develops a model of public exchange whereby voters and education policy makers exchange with one another within school districts because school district consolidation lowers alternatives to voters parents consolidation is hypothesized to raise public education spending because weakened intergovernmental competition allows policy makers to promote their own utility rather than that of constituents models of public education spending and academic performance are estimated over 1988 1990 while evidence indicates little support for the traditional treatment of the leviathan hypothesis that greater competition lowers public spending this paper argues that education spending by itself does not fully provide a valid test of the leviathan hypothesis since spending by itself does not necessarily indicate the quality of public education programmes empirical evidence indicates that greater numbers of schools and school districts promote higher student achievement as evidenced by higher math and v

searching for leviathan comment and extension in a recent article wallace oates 1985 investigated whether fiscal decentralization tended to act as a constraining influence on the overall size of the public sector this hypothesis has been advanced by several alternative theories of government behavior including richard musgrave s 1959 model of how the distribution function of government would be carried out by subnational governments geoffrey brennan and james buchanan s 1980 leviathan model and the more traditional public choice model for example walter hettich and stanley winer 1984 all contend that the decentralization of tax and spending decisions introduces competition among governmental units seeking to attract citizens and other mobile resources and thereby constrains taxing power oates analyzed two data sets one pertaining to the state and local sector in the united states and the other consisting of a sample of 43 countries and found little empirical support for the decentralization hypothesis the purpose of this paper is to reconsider his analysis in the case of state and local governments specifically it will be argued that oates s measures of decentralization may be inappropriate to test the hypothesis furthermore by taking into account the structure or composition of local governmental jurisdictions within a state empirical support of the decentralization hypothesis can be marshaled for general purpose local governments such as counties and municipalities i measuring fiscal decentralization among the states

an empirical analysis of state and local tax structure in the context of the leviathan model of government this paper has investigated the ability of an extreme and relatively simple model of political behavior to explain the level of revenues generated by state and local governments in general the behavior of these governments appears to be at least consistent with many of the fiscal outcomes predicted by the leviathan theory several although not all of the specific leviathan theory hypotheses considered received empirical support the evidence was consistent with the hypothesis that states utilizing comprehensive tax bases especially a personal income tax can be expected to generate higher levels of aggregate revenues strong support was also observed for the contention that intergovernmental competition by general purpose substate governments may serve as a substitute for constitutional constraints in limiting the revenue generating power of local governments

the power to tax analytical foundations of a fiscal constitution preface 1 taxation in constitutional perspective 2 natural government a model of leviathan 3 constraints on base and rate structure 4 the taxation of commodities 5 taxation through time income taxes capital taxes and public debt 6 money creation and taxation 7 the disposition of public revenues 8 the domain of politics 9 open economy federalism and taxing authority 10 toward authentic tax reform prospects and prescriptions epilogue notes selected bibliography index

the convergence of fiscal regimes and the decline of the tiebout effect i have argued that the spatial convergence of per capita incomes and income distributions lead to the spatial convergence of fiscal regimes and that convergence diminishes opportunities for tiebout type moves in the economy considerable empirical evidence confirms the hypothesis states with relatively low initial levels of taxation have had relatively higher growth rates of taxation low per capita income states have had higher growth rates of real per capita incomes than have had high per capita income states the high economic growth rate states have had lower growth rates of taxation than the low income growth rate states spatial convergence of per capita incomes is associated with spatial convergence of fiscal regimes furthermore there has been a spatial convergence in income distributions increased equality of income empirically is associated with increased size of the fiscal regime confirming the public choice insight the spatial convergence of fiscal regimes has diminished the gains from tiebout type moves as such fiscal convergence diminishes the opportunity for citizen voters to reveal their preference for collective goods through migration of course at the limit where per capita incomes and the income distribution are invariant spatially the spatial convergence of fiscal regimes makes the musgrave samuelson problem of revealed preference for collective goods as intractable at the state and local levels as at the national level tiebout type moves no longer allow escape from leviathan

on distinguishing between leviathan and public interest governments in a federal state the purpose of this paper is to derive testable implications for the proposition that provincial governments in a specific federal system are leviathans that is revenue maximizers the leviathan model associated with brennan and buchanan 1980 hypothesizes that governments behave like monopolies who seek to maximize their revenue this model is contrasted with an alternative hypothesis the public interest theory a theoretical model of a federal state based on the canadian system is constructed and testable implications are derived the principal feature of the model is that it is set in the context of a particular game involving the federal government provincial governments and a consumer in attempting to model this situation care has been taken to try to incorporate as many institutional features of the canadian federal system as possible while still allowing the model to be somewhat parsimonious with some modification the model may be applicable to other countries with similar federal systems

an analysis of the composition of r d spending research and development encompasses a myriad of activities generally research is the primary search for technical or scientific advancement and development is the translation of such advancement into product of process innovations the national science foundation has fostered an even finer breakdown basic research applied research and development in practice however r d is more heterogeneous than these labels imply the research fields associated with basic research include areas in both the physical and biological sciences applied research and development projects relate to product groups as diverse as all the activities in the industrial sector nevertheless most previous empirical studies of the microeconomic aspects of r d have treated r d spending as a single homogeneous activity consequently a generally acceptable set of variables has developed for explaining inter firm levels of r d spending but virtually nothing is known about the determinants of the inter firm composition of r d

overlapping jurisdictions substitutes or complements this paper presents a simple model of the demand relationship between the activities undertaken by overlapping governments and uses the framework to estimate the relationship between municipal and county expenditures the empirical results reveal a complementary relationship between county and city general expenditures any public sector expansion effects of monopoly power at the county level will therefore be reinforced by greater municipal spending further expanding the total size of the local public sector on the other hand changes in county police and roads expenditures appear to have no strong stable impact on municipal police and roads expenditures respectively providing no reinforcing or offsetting municipal spending responses to decisions at the county level

federal funding and the level of private expenditure on basic research economists have long been interested in questions concerning the role of government in stimulating private sector innovation in the late 1950s blank and stigler 2 asked in particular whether government funded industrial research and development r d activity was likely to stimulate or substitute for private sector expenditure on r d a number of studies have since addressed this issue and most conclude in favor of the existence of a positive relationship between federal r d expenditures and the level of private r d investment leyden and link 8 have provided a theoretical rationale for this observed complementarity they suggest that federallyfunded industrial r d activity may generate knowledge spillovers and other infratechnology that may raise the productivity of inputs into private r d r d is a heterogeneous activity and a question which has received relatively little attention in the literature is the extent to which the apparent complementarity between federal and private industrial r d spending holds for the different components of firms r d budgets cross section evidence on this issue produced by link 13 suggests that

centralization and government competition this paper examines the relationship between government size and fiscal centralization with specific focus on the separate influences of centralism and fragmentation on the size of public sector in the united states the empirical findings at the national level provide support to the hypothesis that fiscal decentralization leads to a smaller government the findings at the state and local levels however show no empirical relationship between government size and the degree of centralization

government size decentralization and growth empirical evidence from italian regions abstractthe aim of this study is to empirically assess the relationship among government size decentralization and economic growth in italian ordinary regions the empirical analysis based on a panel dataset on italian regions provides evidence in support of the existence of an inverted u shaped relationship between public expenditure and economic growth that depends on the degree of fiscal decentralization in particular according to our estimates on the specific italian case the optimal degree of decentralization is around 32 while the optimal government size value is approximately 52

assessing the effect of public subsidies on firm r d investment a survey this survey examines the empirical literature on the relationship between public r d subsidies and private r d investment over the past five decades the survey reveals a considerable heterogeneity of empirical results that cannot be explained fully by methodological issues we aim to provide further explanations of the possible causes of that heterogeneity in particular we emphasise a set of issues that in our view are critical to understanding the potential effect of public r d subsidies on private r d spending special attention is paid to the dynamic aspects and composition of firm r d the constraints faced by the firm such as financial constraints and the amount and source of public subsidies none of these issues have been investigated in depth we formulate a set of research assumptions to guide future empirical research in this field

why are governmental r d and private r d complements it is well known that government r d and private r d have a complementary relationship however no previous study has provided an explanation for why that complementary relationship exists this paper argues that infratechnology is the critical link between governmental and private r d and that the observed complementarity is the result of technical complementarity at the production level between funding infratechnology and knowledge sharing a theoritical framework based on this argument is developed and examined empirically for supporting evidence evidence of technical complementary is found as well as evidence that governmental r d stimulates the sharing of knowledge

the effect of government funding on private industrial research and development a re assessment a number of previous studies have attempted to determine the effect of federal support of research and development r d performed in industry on the rate of private investment in r d by estimating regressions of private r d expenditure on federal industrial r d expenditure controlling for total demand sales and in some cases other variables this paper presents arguments and econometric evidence in support of the hypothesis that due to misspecification of the private r d equation i e failure to distinguish government sales from other sales previous estimates of the effect of federal industrial r d on private r d funding are seriously upwardly biased

a dynamic model of weak and strong ties in the labor market the study develops a simple model where workers can obtain a job through either their strong or weak ties it shows that increasing the time spent with weak ties raises the employment rate of workers it also shows that when the job destruction rate or the job information rate increases workers choose to rely more on their weak ties to find a job the model is extended so unemployed workers can also learn of a vacancy directly from an employer results show that equilibrium employment and time spent with weak ties are sometimes but not in all cases positively related

interjurisdictional competition and local public finance assessing the modifying effects of institutional incentives and fiscal constraints analysts have sought for years to explain the variations in municipal expenditures across communities with only modest success however recent efforts combining core propositions from the leviat

adolescent alcohol use sociability and income as a young adult we use data from the national longitudinal survey of adolescent health add health to study how sociability and adolescent alcohol use impact personal income as a young adult we find that factors which enhance not only individual sociability but also social interaction at the community level are positively linked to future earnings of adolescents adolescents whose friends and friends of friends have greater sociability reap long term labour market rewards into adulthood after adjusting for individual and community sociability the effect of teenage alcohol consumption on labour market earnings as young adults is reduced our results suggest that earnings premiums associated with adolescent alcohol consumption may be partially explained by social network dynamics

fiscal decentralization and government size an extension this paper analyzes one method governments employ to circumvent the discipline of a competitive system of fiscal federalism intergovernmental collusion in the form of intergovernmental grants grants it is argued serve to encourage the expansion of the public sector by concentrating taxing powers in the hands of the central government and by weakening the fiscal discipline imposed on governments forced to self finance their expenditures the results reported suggest that intergovernmental grants do encourage growth in the public sector the results offer further support for the use of monopoly government assumptions in public sector modeling

exit voice and mimicking behavior evidence from swiss cantons previous empirical literature hasshown that in order to overcome agencyproblems voters make inter jurisdictionalcomparisons of fiscal performance whenmaking electoral decisions incumbents therefore anticipate voters feedback by copying fiscal policy decisionsfrom neighbors this paper argues thatfiscal autonomy exit as well as directlegislation voice enrich politicalcompetition reducing thus the influence of electoral competition onfiscal decisions consequently policymimicking does not matter in circumstancesof direct legislation and fiscal autonomywhere the impact of voters on the politicalagenda is particularly strong based onpanel data between 1980 and 1998 we findencouraging evidence supporting ourtheoretical arguments

experimental labor markets and policy considerations incomplete contracts and macroeconomic aspects this survey focuses on experimental labor markets investigating two aspects that are important for a better understanding of labor market relations and their consequences for labor market policies the first part of the survey is dedicated to papers that assess the prevalence of reciprocal considerations in incomplete labor contracts the second part summarizes the relatively small but growing experimental literature exploring labor market issues in macroeconomics and public finance studying the interaction between taxation and labor market outcomes

reciprocity under brief and long time delays we report the results from three experiments embedded in the same overarching design which extends the gift exchange paradigm for the study of worker employer relationships we focus on the effect of the length of the delay between the time at which workers learn their wage and when they choose an effort level on the relationship between wage and effort we compare effort choices made within a few hours with those made several weeks afterward we find that the strength of the wage effort relationship decreases over time and this change appears to be driven by workers who receive low wages jel c91 j33 m52

does fiscal decentralization constrain leviathan new evidence from local property tax competition this paper reexamines whether fiscal decentralization constrains leviathan government using panel data for pennsylvania we compare actual property tax rates to the leviathan revenue maximizing rates for municipalities school districts and counties using spatial econometric methods we also estimate the degree of spatial dependence at the three levels of local government we find that fiscal decentralization results in stronger intergovernmental competition and lower tax rates we also find evidence of collusion among school districts that exhibit high interdependence but also high tax rates this calls into question the current literature s blind use of spatial dependence as a measure of intergovernmental competition

the effects of mission oriented public r d spending on private industry this paper addresses the question of how government mission oriented r d spending affects private r d spending and thereby the total investment in technology the problem is approached within the context of the capital asset pricing model in which the firm views investment projects in terms of their risk and return characteristics the firm is assumed to produce jointly an established product and an r d intensive product where the latter generates an additional output of technology or spillover that is used as an input into the former by investing in r d the firm alters its risk and return characteristics in two ways through the expected profits from the sale of the r d intensive good and through the expected profits from the spillover in this model government mission oriented r d contracting affects the firm by enabling it to separate to some extent these two sources of risk and return the main implication of the analysis is that while some public crowding out of private r d is likely this is almost certain to be incomplete the empirical evidence from the u s transport industry supports the model and suggests that each dollar of government funding adds around 92 cents to total r d spending crowding out private investment by as little as eight percent private companies in the united states perform a great deal of publicly funded r d contract work notably in connection with defence space exploration energy and health this work is generally believed to make two contributions to society a direct effect of providing technology intensive public goods and an indirect or spillover effect into the technology content of the private goods produced by the firms which undertake the government contracts for example space technology has produced heart pacemakers alongside cryogenic insulation materials while automatic instrument landing systems benefit holidaymakers as well as air force pilots

estimating the impact of government r d abstract if we do not pay for an input it is important it is suggested that the r d literature by ignoring the fact that government r d is given away has confused zero value of marginal product with zero marginal physical product