LOCAL TAX BURDENS AND THE SUPPLY OF BUSINESS SITES IN SUBURBAN MUNICIPALITIES*

ABSTRACT. The purpose of this study is to examine the effects of local household tax burdens and other community attributes on the supply of business sites made available by local municipalities. A model of community site supply is tested in which municipalities trade off increased fiscal benefits from business location and reductions in environmental quality that accompany industrial and commercial development. This tradeoff is embodied in municipal zoning decisions. Empirical analysis of industrial and commercial zoning in two rapidly growing suburban counties of the Philadelphia metropolitan area provides considerable support for the tenets of community site supply theory.     

URBAN RIOTS AND THE GROWTH OF STATE WELFARE EXPENDITURES

This article examines the relationship between urban riots and increases in state welfare spending in the 1960s. It finds little evidence of a direct relationship between rioting and state welfare spending increases from own funds; but it does provide evidence that state welfare spending increases from federal funds were related to the level of urban rioting. Possible explanations for this pattern of findings are discussed and directions for further research are suggested.     

THE LONG-RUN ECONOMIC IMPACTS OF FEDERAL,STATE, AND LOCAL FISCAL POLICIES IN METROPOLITAN AREAS*

ABSTRACT. This paper uses new estimates of metropolitan factor demand and output supply functions to study how federal, state, and local fiscal policies affect metropolitan economies. We illustrate our work with findings for ten metropolitan areas in five states for changes in state corporate income taxes, local property taxes, the federal corporate income tax, an investment tax credit, interest rates, public capital stocks, output prices, and tax and regulatory policies affecting gross wages. It is clear from these simulations that a policy that is nominally the same everywhere will have repercussions that vary widely across regions and cities.     

MUNICIPAL AMALGAMATION AND THE GROWTH OF THE LOCAL PUBLIC SECTOR IN SWEDEN*

ABSTRACT. The proposition that a decentralized structure of local governments can effectively constrain public sector growth is empirically investigated. Data on Swedish municipal sector size for the 1942–87 period are analyzed within the context of a median voter model. The results indicate that decentralization, measured by the number of units of local government serving a given population, constrains the influence of institutional factors (e.g., rent seeking, bureaucracy) on local budgets as long as these units exceed some minimal threshold size. The findings support the view that communities should be given the flexibility to determine their own ideal pattern of local governments.     

INDUSTRIAL CENTERS AND REGIONAL GROWTH IN THE PRESENCE OF LOCAL INPUTS*

ABSTRACT. A large proportion of regional production takes place in nontraded goods and services. In addition, significant productivity increases can be observed in some segments of this sector. Starting from these two empirical observations we construct a model of growth in a two-region setting with factor mobility. The growth process is based on endogenous technological change in the nontraded input sector, whose output serves as an input in the production of one of the two final goods, the so-called industrial good. We consider two extreme cases, one with locally limited, the other with interregional knowledge spillovers. Conditions are established under which interior solutions with production of local inputs and steady-state growth in both regions result, and others under which we find a core-periphery pattern with growth concentrated in one region only. The stability of the equilibria is discussed by considering the transition processes. Finally, it is shown that catching-up as well as leapfrogging may occur, if new technologies become available.     

DECENTRALIZED TAX COMPETITION FOR BUSINESS CAPITAL AND NATIONAL ECONOMIC EFFICIENCY*

ABSTRACT For a nation composed of independent regions, the effects of local tax competition for business investments are examined. It is first shown that atomistic regional authorities tax only local resources to finance the provision of public services to business. Thus, an efficient interregional equilibrium is induced. Various political/institutional constraints are shown to cause misallocation of the capital stock and an inefficient provision of public services. The characterization of the inefficiency is shown to vary widely, depending upon the constraint under consideration.     

SCARCITY AND AGRICULTURAL LAND RENT IN LIGHT OF THE CAPITAL CONTROVERSY: THREE VIEWS*

This paper examines the different theories of agricultural land rent proposed by the neoclassical, Marxist, and neo-Ricardian schools of economic thought. In so doing the paper undertakes two tasks: first, to explore the different definitions of scarcity that emerge from each school; and secondly to check the consistency between the view of scarcity and the analytical theory of rent that each school proposes. It is concluded that for each of the schools there is an inconsistency between their respective view of scarcity and the corresponding theory of rent, although the reasons for that inconsistency vary. It is further argued that although this inconsistency cannot be resolved for the case of neoclassical economics, there is some prospect of resolution for Marxist and neo-Ricardian theories.