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"Soft-Budget Constraints and Local Expenditures"

This paper investigates how the soft budget constraint with grants from the central government to local governments tends to exaggerate inefficient local expenditures. We first develop a theoretical model, which explains soft budget problem in a multi-government setting. We then show that in Japan's case local governments implemented inefficient public investments and hence the bad outcome of soft budget problem occurred in the 1990s.
Year of publication:
2006-05
Authors: Doi, Takero ; Ihori, Toshihiro
Institutions: Center for International Research on the Japanese Economy (CIRJE), Faculty of Economics
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Extent:
application/pdf
Series:
Type of publication: Book / Working Paper
Language: English
Notes:
Number CIRJE-F-422 33 pages longages
Source:
Persistent link: https://www.econbiz.de/10004999319
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