Akai, Nobuo
The Fiscal Common Pool Problem, Municipal Mergers, and Spillovers / Nobuo Akai and Tsuyoshi Goto
Resumen.
Bibliografía.
Mergers of local governments, commonly referred to as municipal mergers, have been widely implemented to internalize spillover effects. Many empirical studies point out that municipalities change the intertemporal budget allocation by increasing their debt issuance before mergers and they consider that this debt issuance is induced by the “fiscal common pool problem” because of pooled budgets after mergers. However, this phenomenon has yet to be analyzed theoretically. Therefore, this paper examines the mechanism of increased debt issuance before municipal mergers. We compare the debt issuance in the merger case with the level in the socially optimal and nonmerger cases. We find that the amount of debt issuance is larger in the merger case than in both other cases. The difference vanishes when spillovers are perfect.
ADMINISTRACION LOCAL
PRESUPUESTOS LOCALES
CUENTAS PRESUPUESTARIAS LOCALES
DEUDA PUBLICA
INGRESOS PUBLICOS
CONCENTRACION
FEDERALISMO FISCAL
Goto, Tsuyoshi
Public Finance Review 0048-5853v. 50, n. 3, May 2022, p. 307-335
The Fiscal Common Pool Problem, Municipal Mergers, and Spillovers / Nobuo Akai and Tsuyoshi Goto
Resumen.
Bibliografía.
Mergers of local governments, commonly referred to as municipal mergers, have been widely implemented to internalize spillover effects. Many empirical studies point out that municipalities change the intertemporal budget allocation by increasing their debt issuance before mergers and they consider that this debt issuance is induced by the “fiscal common pool problem” because of pooled budgets after mergers. However, this phenomenon has yet to be analyzed theoretically. Therefore, this paper examines the mechanism of increased debt issuance before municipal mergers. We compare the debt issuance in the merger case with the level in the socially optimal and nonmerger cases. We find that the amount of debt issuance is larger in the merger case than in both other cases. The difference vanishes when spillovers are perfect.
ADMINISTRACION LOCAL
PRESUPUESTOS LOCALES
CUENTAS PRESUPUESTARIAS LOCALES
DEUDA PUBLICA
INGRESOS PUBLICOS
CONCENTRACION
FEDERALISMO FISCAL
Goto, Tsuyoshi
Public Finance Review 0048-5853v. 50, n. 3, May 2022, p. 307-335