bluuebunny/crossref_metadata_2025 huggingface dataset:
An Analysis of Government Spending in the Frequency Domain
Authors: Cohen Darrel
Published: May 2024

This paper utilizes frequency-domain techniques to characterize economically important properties of government spending and to determine the degree of substitutability between government and private consumption expenditures. Using post-war data for the United States, the analysis reveals that defense spending is best modeled as exogenous with respect to the aggregate economy and that nondefense spending (growth) appears to be white noise. Further, the unemployment rate has a very high coherency (correlation) at the business cycle frequencies with unemployment insurance. By contrast, social security benefits are largely insensitive to the business cycle but are influenced by seasonal and demographics factors. Finally, using data from 12 industrialized countries, the paper finds evidence, although inconclusive, suggesting that direct substitutability between government and private consumption spending is widespread and often of sizable magnitude. in the process the exercise illustrates how spectral techniques can be combined with a standard intertemporal optimizing model to deliver restrictions that are testable in the frequency, but not the time, domain.
Introduction to Symposium on Financing and Homeland Security
Authors: Guest Peter Eisinger
Published: May 2024

Homeland security functions are a new and costly responsibility for local governments. What complicates this new function is that it must be implemented in the context of the federal system, where appropriate funding burdens and roles are still being worked out. Both papers in this symposium address these tensions and uncertainties.
U.S. Cities and Homeland Security: Examining the Role of Financial Conditions and Administrative Capacity in Municipal Preparedness Efforts
Authors: Gerber Brian J. , Cohen David B. , Stewart Kendra B.
Published: May 2024

In this paper we address a question fundamental to understanding the potential effectiveness of homeland security policy across the U.S. federal system: what explains homeland security preparedness efforts at the municipal government level? Using data gathered from a nationwide survey of municipal officials, we examine the effects of city governments’ financial and administrative resources, along with measures of broader policy context, on several attitudinal and behavioral indicators of homeland security preparedness. We find that administrative resources have consistent and relatively robust explanatory power and we lay out several policy implications from the analyses presented.
Introduction
Authors: Eusepi Giuseppe
Published: May 2024

The welfare debate to date spans a period of over forty years. Welfare-state economists, horrified by market failures, have commonly thought it necessary to invoke governments’ intervention in welfare programs. in their eagerness to combat the market, they have managed to write as though governments do not fail. A charge that purely market-oriented economists lay at welfare-state economists’ door is that government is a very real danger and one that compounds market failures. the papers included in this symposium attempt to draw up an ordered account of the market-oriented position. From various angles, the six papers provide reflections on the role played by institutional settings in the decision of how and how much to redistribute within a generation and between generations.
‘Motivation Spillover’: Tax Policy Designed to Mobilise Collective Action
Authors: Jones Philip
Published: May 2024

Instrumental citizens have no incentive to vote because a single vote has only a minuscule chance of changing an electoral outcome. as individuals’ motivation to vote is to express identity with values signalled by policy, there are incentives to design tax policy to appeal to expressive voters. the objective in this paper is to consider the implications for public finance management if policy preference and taxpayer response are sensitive to perceptions of the intrinsic value of expressive action. If policy is designed to emit low-cost signals that inform perceptions of the intrinsic value of expressive action, taxpayer response will depend on more than the impact that tax exerts on budget constraints (e.g. on relative price and on income). Policy design features are capable of mobilising collective action to achieve outcomes that would otherwise remain ‘undersupplied’ (in terms of individuals’ own preferences). Tax policy can be designed to achieve more than the sum of instrumental response (to tax, subsidy and regulation).
101 Proposals to Reform the Stability and Growth Pact. Why So Many? A Survey
Authors: Jonung Lars , Larch Martin , Fischer Jonas
Published: May 2024

The failure of key EU Member States to respect the provisions of the Stability and Growth Pact (SGP) a few years after its inception triggered a heated debate on how to reform the framework of fiscal policy coordination in the Economic and Monetary Union (EMU). This paper analyzes 101 reform proposals presented by professional academic and non-academic economists prior to March 2005, when the Council of the European Union adopted a revised version of the SGP. Roughly four different schools of thought concerning the reform of the SGP are identified. in line with the main findings of the political economy literature, all four schools of thought share the view that in the absence of specific rules fiscal policy would lead to excessive deficits and hence affect the conduct of the common monetary policy. However, beyond this common denominator, there is no consensus on how best to co-ordinate fiscal policy.

We present several explanations for the multitude of proposals, the most important being the present lack of a consensus in the economics profession concerning the role of fiscal policy. Economists hold diverging views on the goals, instruments, efficiency and institutions for fiscal policy-making. This state of affairs is in sharp contrast to the case of monetary policy. Also, the euro area is the first case where monetary policy-making is centralized while fiscal policy-making is decentralized to national governments.
Introduction to the Symposium on “How to Achieve Fiscal Sustainability in Industrialised Countries”?*
Authors: Afonso António , Schuknecht Ludger
Published: May 2024

The papers in this symposium address fiscal sustainability within the context of aging related fiscal costs and argue that macroeconomic and political costs of delaying fiscal adjustments can be significant. the authors also analyse consolidation and reform programmes and confirm the importance of comprehensive fiscal consolidation programs that focus on recurrent public expenditure and growth incentives. A consensus seems to be firming up that fiscal rules help to contain deficit biases in fiscal policy and the proper functioning of EMU.
Enterprise Pensions in China: History and Challenges
Authors: Zhang X. Y.
Published: May 2024

Since the establishment of the People's Republic of China by the Communist Party in 1949, the government has introduced a social welfare system for both urban and rural populations. Before the economic reform and the open door policy that started at the end of the 1970s, enterprises were not concerned about the effect of their payments because their budgets were not completely separated from the government budget. After more than 50 years of changes and reforms to the pension system, the current system in China is still dominated by the public pillar, a largely urban-based, contributory, partially funded and defined contribution system. for the mainstream of the urban working population, the social security system provides the main source of assistance for maternity, medical service, unemployment, work injury and old-age pensions. This paper focuses only on the old-age pension scheme. the evolution of the Chinese insurance-based state pension system is described. as readjustments and restructuring are taking place in politics as well as in the economy, the current pension system faces many challenges, which are also discussed and suggestions are made for further reforms for addressing these challenges.
Fiscal Decentralization in China and India: Competitive, Cooperative or Market Preserving Federalism?
Authors: Singh Nirvikar
Published: May 2024

This paper provides a comparative assessment of fiscal decentralization in China and India, including the standard components of expenditure and revenue assignments and institutions for intergovernmental transfers, as well as the nature of sub-national authorities over general economic activity. in particular, the case of China, where town and village enterprises have been very active, is contrasted with that of India, where local governments remain circumscribed in their authority, despite decentralizing reforms. the implications of differences in decentralization for fiscal outcomes and economic growth are discussed. the characterization of each country in terms of concepts of federalism, i.e., competitive, cooperative and market preserving federalism, is discussed, in attempting to abstract from the two cases to more general lessons for fiscal decentralization.
Strategic Consensus and Heterogenous Voters When Voter Turnout is Uncertain
Authors: Aidt Toke S. , Dutta Jayasri
Published: May 2024

This paper argues that uncertain or random voter turnout plays a key role in mediating conflicts of interest between voters and politicians on the one hand and heterogenous groups of voters on the other. Random voter turnout creates an incentive for politicians to seek consensus because it is unclear ex ante who will hold the majority among those who turn out to vote. We argue that this leads to efficient provision of public goods if preference heterogeneity is not too large, and that it protects (large) minority groups against the tyranny of the majority. We also argue that compulsory voting may not be desirable because it reduces randomness in turnouts.
Tax Complexity with Heterogeneous Voters
Authors: Galli Emma , Profeta Paola
Published: May 2024

In democratic countries tax systems are complex and elaborated. the issue of tax complexity is a crucial one in the policy debate about tax design and reforms. A recent trend towards simplification has emerged, at least in developed countries. We argue that tax complexity is the result of the interplay between economic and political factors, and we assess the observed trends and the main features of tax complexity under this perspective. Italy represents an interesting case: changes in the structure of the personal income tax in the period 1974–2005 are meant to reduce tax complexity. Data on the Italian personal income tax suggest the existence of a trade-off in the determination of tax complexity: on one side more complexity is beneficial for a heterogeneous population, since it allows a design closer to individuals’ preferences, while on the other side it is costly. We explore the emergence of this trade-off in a voting model. Median voter models are not able to appropriately capture the multidimensional nature of the determination of tax complexity. A simple probabilistic voting model instead delivers interesting results. We find that, when grouping individuals with different income levels in the same income bracket, on one side the political support by individuals, who necessarily will pay a tax rate different from their preferred one, is reduced, while on the other side the administrative cost of taxation is also reduced.
Heterogeneity, Voting, and Public Policy
Authors: Martin Adam , Wagner Richard E.
Published: May 2024

By distinguishing between surface- and deep-level heterogeneity, this paper explores how heterogeneity among voters might be incorporated into a theory of political economy. Central to this exploration is the distinction between organizations and orders. Existing theories of political economy typically assimilate a state to an organization, and with an election being a vehicle for choosing among competing plans for the organization to pursue. This treatment imposes a deep homogeneity among voters as an analytical point of departure. in contrast, we advance a treatment of polities as orders, with many different organizations operating within their boundaries. This alternative formulation provides analytical space for deep heterogeneity to enter the analysis, and also brings into the analytical foreground the constitutional framework within which state policy emerges.
Funding the Eu Budget: A Case for Inaction?
Authors: Begg Iain
Published: May 2024

The way the EU budget is funded is often criticized, especially in the light of the increasingly complex devices used to limit net contributions. In addition to the formal UK rebate, there are reduced rates of take-up of different funding streams for certain other countries, all of which makes the funding side of the EU messy. Calls for the budget to be funded by a tax (or taxes) assigned to the EU level have repeatedly been articulated. However, the system has one overarching attraction which is that it assures the EU of sufficient revenue to fulfill its spending commitments. This paper offers a critique and assessment of the current system for raising the revenue for the EU budget and considers the conceptual case for a move to a tax of Europe. It appraises the case for abandoning the current system in favor of a tax-funded one and concludes that although the case may be conceptually robust, political economy considerations suggest that change is unlikely for the foreseeable future.
Getting into the Game: Legislative Bargaining, Distributive Politics, and Eu Enlargement
Authors: Aksoy Deniz , Rodden Jonathan
Published: May 2024

This paper examines the relationship between territorial representation and fiscal redistribution in the European Union. Given that small states are over-represented in both the European Parliament and the Council of Ministers, simple models of legislative vote-buying predict that over-represented member states will be favored in the distribution of EU transfers. We examine this proposition for each manifestation of the EC or EU since 1977 with data on agricultural, regional development, and total net transfers.
Symposium on Fiscal Decentralization
Authors: Grewal Bhajan S.
Published: May 2024

Recent years have witnessed an unmistakable rise in interest in fiscal decentralization. At the same time, fiscal decentralization remains controversial and, in the absence of a generally accepted standard definition, is open to multiple interpretations and connotations. Benefits of fiscal decentralization are also disputed by some. Against this background, this special symposium on fiscal decentralization is being published with a view to shedding light on some of the major theoretical and empirical aspects of fiscal decentralization.
Decentralization Measures Revisited
Authors: Martinez-Vazquez Jorge , Timofeev Andrey
Published: May 2024

For the last half of a century, economists in an ever growing literature have been trying to measure decentralization with the purpose of using that measure as either the dependent or an independent variable in their empirical models. The suggested measures essentially boil down to a few concepts: locally raised own revenues, autonomy on expenditure decisions, locally spent national grants, or the number and size of local units. These basic components have entered decentralization measures in various functional forms: additive, multiplicative, in powers, and various mixes of those. This paper revisits these measures and our main finding is that aggregating those distinct dimensions of decentralization into a single indicator inevitably leads to a loss of information. We conclude that in a multivariate framework the distinct aspects of decentralization should enter regression analyses separately, in the most flexible functional form possible. At the same time, while no single indicator can capture all aspects of decentralization, some indicators are more inclusive and informative than others. Therefore, if for some reason we have to use a single indicator, our study suggests which indicator would be more appropriate for the hypothesis at hand. We illustrate these points examining differences in the empirical behavior of different decentralization indicators in relationship to each other and in their statistical association with some relevant economic outcomes in the fiscal decentralization literature.
Incomplete Contracts and the Evolution of Canadian Federalism
Authors: Grewal Bhajan S.
Published: May 2024

Even though the British North American Act 1867 established the Canadian federation with a dominant federal government, Canadian provinces today enjoy much greater fiscal autonomy than they inherited from the constitution. Provincial governments have access to virtually all taxes, raise more in tax revenue than the federal government and enjoy a high degree of autonomy in respect of priorities for public spending. Canada's fiscal decentralization is in contrast to Australia's experience, which has evolved over time towards greater fiscal centralization. This paper examines the evolution of Canadian federalism from the perspective of incomplete contract theory, according to which residual rights over policies are a source of political influence when negotiating intergovernmental fiscal arrangements. In both countries, federal and subnational governments have been engaged in the same kind of conflict for greater power over policies. The difference between the two countries has been, however, that unlike the Australian States, the Canadian Provinces have successfully resisted the pressures put by the federal government and have regained their fiscal power that was once lost in the wake of the Second World War.
Symposium on Public Finance and the Environment
Authors: Aronsson Thomas
Published: May 2024

This short paper summarizes the contributions to the special issue entitled “Public Finance and the Environment”.
Comparative Perspectives on the Relationship of Public Finance and Poverty
Authors: Gittell Ross
Published: May 2024

The mini-symposium in this issue of Public Finance and Management provides an outlet for emerging research on poverty and public finance at a particularly relevant point in time. In the aftermath of the 2008–10 recession rising poverty rates and prolonged durations of poverty will have significant financial impact on national, state and local financial systems. The demand for publically funded social services will be increasing, while the ability of governments to raise revenues will be at risk. Governments around the globe will be forced to reconsider their poverty alleviation programs and their financial systems. The two papers in this symposium offer insight on the relationship between poverty and public finance and suggest public finance strategies for addressing poverty and improving living standards.
Diagnosing Performance Management and Performance Budgeting Systems: A Case Study of the U.S. Navy
Authors: Webb Natalie J. , Candreva Philip J.
Published: May 2024

We present here a case study of an organization within the U.S. Navy that created a new organizational construct and performance management system. We explore the issues faced by naval leaders as they attempt to use their performance information to make resource allocation decisions at the sub-organization level, and drive budgets at the organization and service (navy) level. We diagnose the practical problems a government organization encounters when implementing a performance management system, to include their influence on budgets, and make recommendations for public sector performance budgeting organizations. This case confirms challenges noted in the literature associated with performance management and performance budgeting systems. We offer recommendations for public officials considering such endeavors.
Symposium on Global Financial Crisis and Public Finances
Authors: Grewal Bhajan S. , Brumby Jim
Published: May 2024

This symposium discusses the role of public finances and management in the on-going policy initiatives for economic stabilization and stimulation across countries and regions at differing levels of development, and analyzes the impact of policy initiatives on the medium-term fiscal discipline and long-term sustainability of public finances.
What Explains the Surge in Euro Area Sovereign Spreads during the Financial Crisis of 2007–09?
Authors: Attinasi Maria-Grazia , Checherita Cristina , Nickel Christiane
Published: May 2024

This paper explains the determinants of widening sovereign bond yield spreads vis-à-vis Germany in selected euro area countries during the period end-July 2007 to end-March 2009, when the financial turmoil developed into a full-blown financial and economic crisis. Emphasis is given to the role of fiscal fundamentals and government announcements of substantial bank rescue packages. The paper finds that higher expected budget deficits and/or higher government debt ratios relative to Germany contributed to higher government bond yield spreads in the euro area during the analyzed period. More importantly, the announcements of bank rescue packages have led to a re-assessment, from the part of investors, of sovereign credit risk, first and foremost through a transfer of risk from the private financial sector to the government.
The Impact of the Economic Crisis on the Fiscal Stance of Low Income Countries in the Commonwealth of Independent States
Authors: Brownbridge Martin , Canagarajah Sudharshan
Published: May 2024

The paper analyses how the global economic crisis affected the economies and public finances of three low income, non fuel exporting, members of the Commonwealth of Independent States. The paper discusses the main channels of transmission of the economic crisis. It examines the impact of the crisis on government budgets, the discretionary fiscal policies implemented to help mitigate the adverse impact of the crisis and how these policies were financed. The paper makes estimates of the fiscal impulse in each country in 2009. Finally it assesses the impact of the economic crisis on public debt indicators.
Financial Sustainability and Financial Viability in Australian Local Government
Authors: Dollery Brian , Grant Bligh
Published: May 2024

Sustainability has become an important ingredient in contemporary public policy. However, considerable ambiguity surrounds the precise meaning of sustainability in concrete policy contexts, such as financial sustainability in local government. Using recent Australian national and state public inquiries into fiscal sustainability in local government as an illustrative example, this paper considers the tensions that derive from the dual role of local government as local democratic institution and an efficient local service provider, and the difficulties involved in defining fiscal sustainability adequately. It is argued that the concept of sustainability cannot be meaningfully fully reduced to narrow accounting measures in local government. Financial sustainability would thus be more accurately described as financial viability in local government, with the term sustainability in local government employed to cover local action directed at global sustainability.
Property Tax Administration in Francophone Africa: Structures, Challenges, and Progress
Authors: Monkam Nara F.
Published: May 2024

In the context of a widespread focus on decentralization in Africa, there exists an imperative to find suitable ways to maximize potential own revenue sources at all sub-national government levels. This need in particular and the need for greater domestic resource mobilization by African states in general, has been exacerbated by the current global financial crisis that has led many countries into recession and left developed and developing countries alike scrambling to find solutions at home. In that regard, it has been widely suggested that property taxes would represent an important, if not the best, source of stable revenue at the sub-national level in both developed and developing countries. This paper analyses property tax systems as practiced in some francophone African countries, by identifying major issues and constraints they face; it also explores avenues to strengthen property tax as a source of national and/or municipal revenue.
Book Review: Book Review of Poland's Transition and Its Future
Authors: Polutnik Lidija
Published: May 2024

Elżbieta Mączyń;ska, President of The Polish Economic Society, is the editor of this volume focusing on Poland's transition between 1989 and 2007 and its development opportunities and challenges. Distinguished policy makers and academics assess success of Polish transition as well as contribute a variety of perspectives and opinions about socio-economic systems best suited to address Polish development goals in a global economy.
Variability and Opportunities in Flexible Budgeting: A Local Government Approach
Authors: Beckett Julia , Doamekpor Francois K.
Published: May 2024

The context of budgeting determines the extent of exposure to disturbances and establishes its boundaries and opportunities. Further, budgets that bear the brunt of market and social or national external forces need to be made flexible to ensure success in execution. This study uses historical data on key budget items of local governments to establish boundaries drawn by prior budget policies, and suggests frameworks for ensuring accuracy in the development and execution of a flexible budget.
Funding China's Urban Infrastructure: Revenue Structure and Financing Approaches
Authors: Zhao Zhirong Jerry , Cao Chengxin
Published: May 2024

Urban infrastructure has become increasingly important in China with its rapid urbanization and economic development. However, many questions remain unanswered about how different levels of governments in China gather financial resources to fund its urban infrastructure development, and whether the system is sufficient or sustainable. This article examines financial resources for China's urban infrastructure investment in recent decades. First, the article traces the history of China's urban infrastructure investment since 1949. Second, using data mainly from the China Urban Construction Yearbook (2000–2008), it examines revenue structure and financial approaches for China's urban infrastructure finance, its recent trends and patterns, and disparities across provinces. Finally, the article evaluates unique characteristics of the China-style urban infrastructure investment, and discusses some issues regarding the use of quasi-governmental authorities and land transfer fees.
Book Review: Book Review of Managers as Designers in the Public Services: Beyond Technomagic
Authors: Caiden Naomi
Published: May 2024

Information Technology (IT) has become increasingly pervasive in public administration, but despite its acceptance, has also been accompanied by spectacular failures. This book attributes many of the problems in the adoption of IT by public agencies to “magical” thinking (that it can work wonders) and to isolating IT from other organizational and management processes. The author uses case studies from the United Kingdom to explain how organizational design, evidence based management, and re-engineering can be used by managers to integrate IT projects successfully into their organizations. While the book focuses on management, neglecting some key policy issues, it provides useful insights into IT failures and newer directions in IT implementation.
Symposium on Local Taxation
Authors: Wagner Gary A.
Published: May 2024

This symposium focuses on issues in local taxation. Throughout this issue, the term “local government” will refer to any governmental unit that is lower in authority than the central or national government. While national and international events often drive media coverage and public policy debates, local governments are responsible for providing many of our essential day-to-day services and generate a sizable portion of total government revenue. This special issue is comprised of four excellent articles on various aspects of local government taxation.
Nonprofit Exemptions and Homeowner Property Tax Burden
Authors: Calabrese Thad , Carroll Deborah A.
Published: May 2024

This paper examines the question of whether there is any correlation between the prevalence of nonprofit organizations with property, plant, and equipment exempt from property taxation and the property tax burden for homeowners. Data from the Tax Foundation and Internal Revenue Service was used to analyze general-purpose local governments within larger counties (populations greater than 65,000) in the United States for years 2005 and 2006. Several econometric specifications were used to estimate homeowner property tax burden as a function of the value of nonprofit fixed assets, government tax structure characteristics, and a series of control variables. Our estimates suggest that county geographies with greater presence of nonprofits tend to have higher homeowner tax burdens on average. Specifically, the value of nonprofit tax-exempt fixed assets within a county geography that is 10% above the mean of $15.4 million is generally associated with a median property tax paid by homeowners as a % of household income that is between 0.0009% and 0.0154% above the mean or between $2 and $24 higher on average. The median property tax paid as a % of homeowner's home value would be between 0.0006% and 0.0069% above the mean or between $3 and $12 higher on average. Overall, we find a strong, positive correlation between nonprofit fixed assets and property tax burden for homeowners at the local level.
Political Economy of Taxing Services in the United States
Authors: Pippin Sonja Engeli , Tosun Mehmet Serkan
Published: May 2024

The purpose of this study is to examine the possible determinants of broadening the sales tax base to include services using variables reflecting the political, economic, and demographic environment at the sub-national level in the United States. We start with providing a picture of taxation of services across different states over a 20-year time span. This descriptive part of our study illustrates the variability in taxation of services and leads to the question why some states tax many services while others exclude virtually all services from their sales tax base. The second part of our research addresses this question empirically using regression analysis. Specifically, we measure the impact of states’ political structure (party in power in the legislative and the executive branch), economy (personal income and unemployment), demography (elderly population and minorities), and fiscal policy (tax rates, revenues, etc.) on the number and type of services taxed. Our study contributes to prior literature by providing a detailed and comprehensive account of the taxes on services and some reasons for the cross-state differences. We use data on the number and types of services taxed in each state from the Federation of Tax Administrators (FTA) for the years 1990, 1996, 2004, and 2007. The political environment (legislative and/or executive branch) is measured with dummy variables for the party in power. Economic, fiscal, and demographic data come from the U.S. Census Bureau. Our findings show that the number of services taxed is higher when democrats dominate the political scene and the shares of elderly (65 and older) and young (under 25) population are higher. These results are sensitive, however, to some regression specifications.
Introduction to A Symposium on Democracy and Public Finance
Authors: Wagner Richard E.
Published: May 2024

This symposium contains six papers that treat aspects of the relationship between democracy and public finance. In light of the wide range of state activity these days, the topic of this symposium is understandably broad in scope and yet incomplete in its coverage. Each paper covers a significant aspect of the relationship between democracy and public finance, and the symposium as a whole opens into numerous topics for further research.
Public Finance and the Extent of the Voting Franchise: A Survey of Historical Cases and New Evidence from Early U.S. States
Authors: Horpedahl Jeremy
Published: May 2024

How does the extent of the voting franchise impact public finance in a democracy? In this paper I discuss that question from theoretical and historical perspectives. There is no simple relationship between the extent of the voting franchise and public finance, either in the total size of government spending or the allocation of that spending among different functions. Instead, franchise extensions are the product of the interaction of various groups in the polity, and the process by which the franchise extension occurs is a crucial factor in determining the government budget. Evidence from several historical periods is discussed, as well as new evidence from the U.S. states in the early Nineteenth Century.
Property Tax Delinquency and the Number of Payment Installments
Authors: Waldhart Paul , Reschovsky Andrew
Published: May 2024

At a time when property tax delinquencies are rising and property tax revenues are falling in many parts of the United States, it is especially important to consider the potential impact that property tax administration has on reducing delinquency. In particular, reducing the amount of money a taxpayer must pay at any given time may reduce the rate of property tax delinquency. This study investigates the relationship between the number of annual payment installments and the property tax delinquency rate using a random effects regression model and five years of data from Wisconsin municipalities. The results of the analysis indicate that increasing the number of installment payments from two to three per year reduces the delinquency rate by about one third. Allowing more than three installments, however, does not lead to a statistically significant reduction in the property tax delinquency rate.
How to Ensure Fiscal Sustainability in National and Sub-National Governments
Authors: Hallett Andrew Hughes , Jensen Svend E. Hougaard
Published: May 2024

This paper considers a new framework for achieving fiscal discipline. The key idea is an inter-temporal assignment where regional fiscal policies focus on long-term objectives and federal monetary policies on short-term objectives. For practical implementation purposes, fiscal policy is stated in terms of a target for public debt relative to GDP. The result is a self-stabilizing framework in which the enforcement problem simplifies to checking if a certain primary surplus rule is being followed period by period.
The Restrictiveness of State Tax and Expenditure Limitations and State Debt
Authors: Deller Steven , Maher Craig , Amiel Lindsay , Stallmann Judith I.
Published: May 2024

Using a panel data set of the 50 states from 1969 to 2005 we explore the impact of the restrictiveness of tax and expenditures limitation (TELs) on state debt. Using six characterizations of tax and expenditure limitations we build three unique indices of restrictiveness: one index for expenditure focused TELs, one for revenue focused TELs and one for TELs that limit both revenues and expenditures. We test whether the restrictiveness of TELs is associated with increased use of debt. Using two-way fixed and random effects estimators we find that more restrictive TELS on either expenditures or revenues are associated with higher levels of debt, as expected. States with more restrictive TELs that cover both revenues and expenditures have lower levels of debt.
Cost Shocks and Their Relationship to the Creation, Consolidation and Dissolution of Us Local Governments
Authors: Goodman Christopher B. , Leland Suzanne M.
Published: May 2024

There are several explanations as to why the total number of local governments may fluctuate, including financial viability and purpose. Many speculate the current economic recession will lead to fewer governments. Yet public choice theorists would assert that more fragmentation, not less leads to more efficient government, which should lead to more, not less local governments (Tiebout 1956). Therefore the following paper further explores the micro and macro reasons behind the reduction or increase in the number of local governments in the United States. Using county-level data from five Census of Governments from 1982 to 2002, we test whether the number of local governments in the US increases or decreases during an economic shock.
Symposium on Amalgamation and Financial Sustainability in Local Government: Part 2
Authors: Dollery Brian , Grant Bligh
Published: May 2024

Despite the longstanding nature of local government as a topic of academic inquiry, the question of financial sustainability and in particular council amalgamation as a means of improving the operation of municipalities continues to be a salient feature of local government studies writ large. Grounded in the claim that municipal population size bears a strong relationship to financial sustainability, programs of structural reform and in particular council amalgamation continue to be pursued, despite the absence of empirical support for this claim. This Symposium focuses on the effects of amalgamation on the financial sustainability of local government.
Local Government Reform: Is it Effective on Debt Burdens?
Authors: Park Ji-Hyung
Published: May 2024

City and county governments consolidate expecting to improve government efficiency. Expenditures, tax revenues, and local economic development are crucial determinants of government debt burdens. However, little attention has been devoted to the relationship between city-county consolidation and the level of debt burden. This study reviews the literature and explores the relationship between city-county consolidation and debt burdens. It reveals that certain factors, namely the level of public expenditure, economic development, taxes and other revenues, assessed value, and ‘political strength’ have all been assessed as affecting debt burdens. Taking consolidated and non-consolidated local governments in Korea, fixed effects regression analysis was employed to test the hypothesis that city-county consolidation is associated with an increase in the debt burden of local government. The results support the hypothesis of a positive correlation between city-county consolidation and debt burdens.
An Evaluation of Amalgamation and Financial Viability in Australian Local Government
Authors: Dollery Brian , Grant Bligh , Kortt Michael
Published: May 2024

Like numerous other local government systems in developed countries, Australian local government confronts daunting financial problems, perhaps most acutely evident in the emergence of a severe backlog in local infrastructure maintenance and renewal. Australian local government policy makers have relied to an unusual and extreme degree on compulsory council consolidation as the main policy instrument to tackle the financial crisis. This paper sets out the dimensions of the financial crisis and the attendant heavy reliance on forced amalgamation and then goes to consider the efficacy of compulsory council consolidation as a means of improving financial viability in Australian local government through the prism provided by eight national and state-based public inquiries into financial sustainability in local government over the past decade. With one exception, these inquiries are skeptical of the ability of forced amalgamation to improve local authority financial viability.
Amalgamation in New Zealand: An Unfinished Story?
Authors: Reid Mike
Published: May 2024

In common with much of the world, local government discourse in New Zealand is, and has been for much of the sector's existence, dominated by the issue of numbers and scale. Local governments, which developed to provide public services to often small, emerging communities in the early stages of the country's colonial development, continue to be challenged to enhance capacity and improve efficiency - themes that resonate acutely as the country continues to deal with the fall out of the great financial crisis. Facing yet another period of structural reform the trade-off between size and responsiveness, or efficiency and democracy, is still to be satisfactorily resolved.
Taxation and Development: What Have We Learned from Fifty Years of Research?
Authors: Bird Richard M.
Published: May 2024

We have learned a great deal about taxation and development over the last half-century but even the best research answers to particular questions have been difficult to apply in practice. The standard approach to tax and development has undergone a number of major model changes over the years but no magical fiscal medicine suitable for all has been found. This brief paper provides a perspective on a half century of research on taxation and development and notes some questions that call for more research. Moreover, since even the best research is only one of many inputs shaping public policy to some extent the task is not so much to improve research as to improve how we market what we learn to those who can, if they wish, put the knowledge to use. Building up adequate institutional capacity in the tax field, both inside and outside government, is critical to being able to adapt policies to changing circumstances and needs, thus ensuring some degree of robustness and resiliency. The role of outsiders like academics and aid agencies in this process is more to be supportive when countries want to reform their systems than to tell them when and how to do it.
Preferential Assessment for Open Space
Authors: Sundberg Jeffrey
Published: May 2024

Land with little or no development, often referred to as open space, can provide environmental and amenity benefits to society. Twenty-three states use tax expenditures as an incentive to keep land undeveloped. These tax expenditures are the result of preferential assessments that reduce the property taxes on qualifying parcels. The programs vary in many ways, including the method used to determine the tax expenditure on a particular parcel, the conditions necessary for qualification, and the penalty for altering the use of land enrolled in the program. This review examines the programs and discusses the different approaches used. It presents a case study of tax expenditures for open space protection in Georgia, demonstrating the technique used to calculate the expenditure and the wide variation in costs across counties. The methods used to determine the tax expenditure amount and the nature of the benefits received lead to concerns about the efficiency of the programs.
Property Tax Abatement as Tax Expenditure?
Authors: Wassmer Robert W.
Published: May 2024

Tax expenditures are revenue losses resulting from provisions in tax law that allow a special exclusion, exemption, or deduction from normal payment. Property tax abatement is a full or partial reduction in the normal property tax liability owed to a state or local jurisdiction. Accordingly, a calculation of annual tax expenditures for a state or locality should include some accounting for annual property tax abatement. The traditional manner of doing this is to sum the annual value of property tax revenue foregone through abatement. The intent of this paper is to question this simple approach. Offered here are specific characteristics to look for in property tax abatement programs that make it more reasonable to count all abatement as tax expenditure. Included also are examples of how to do this for three states. A refinement of how abatement translates into tax expenditure is a positive step forward in developing the tools needed to evaluate the desirability of property tax abatement.
Symposium on Public Finance after the Crisis: U.S.A. Introduction
Authors: Seligman Jason S.
Published: May 2024

In the aftermath of the Financial Crisis and Great Recession, Public Finance has strained amid declining tax revenues and increased demand for transfer payments and service. At the federal and the municipal level government finances have weakened. This special issue is devoted to consideration of financial hardship of both government and citizens. Three articles target various aspects of governments’ challenges and suggest that both government and citizens have legitimate reason for concern in areas which many thought to have been stable or improving, broadly over the 20th century.
Detroit Property Tax Delinquency: Social Contract in Crisis
Authors: Alm James , Hodge Timothy R. , Sands Gary , Skidmore Mark
Published: May 2024

As the country emerges from the real estate crisis, the City of Detroit, Michigan, continues to struggle, and is currently in the midst of bankruptcy proceedings. Falling property values have led to significant reductions in property tax revenues. In addition, about half of property owners are tax delinquent, resulting in uncollected tax revenues of about 20%. This high rate of tax delinquency results from a confluence of factors including limited tax enforcement, feelings of tax inequity, and failure to provide public services, all of which have contributed to a breakdown in the social contract between the city and its residents. In this article we develop a theoretical model of the individual decision to become delinquent on one's property tax payments. We then use detailed parcel-level data to evaluate the factors that affect both the probability that a property owner is tax delinquent and, conditional upon delinquency, the magnitude of the delinquency. Our estimates show that properties that have lower value, have longer police response times, are non-homestead (non-owner occupied residential properties), have a higher statutory tax rate, have a higher assessed value relative to estimated market value, are owned by a financial institution or by a Detroit resident, are delinquent on water bills, and exhibit a lower probability of enforcement are more likely to be tax delinquent. These findings can be used to inform policies targeted at improving tax compliance within the city.
Falling Short: Intergovernmental Transfers in China
Authors: Liu Yongzheng , Martinez-Vazquez Jorge , Qiao Baoyun
Published: May 2024

This paper provides quantitative and qualitative assessments of the equalization impact on regional fiscal disparities of the current fiscal transfers system in China. It also discusses the main problems with the design of transfers and the options for their reform. In particular, by using provincial level data for the period 1995–2011 and county level data for the period 1995–2005, we document the trends in own revenue disparities across and within provinces and analyze how the different types of fiscal transfers have affected these two types of disparities. The paper also examines how expenditure disparities have translated into disparities in service provision and simulates the additional amounts of funding needed from equalization grants to bring the less well-off provinces to the country average for service provision.