Generational conflict affects the supply of public welfare services, and the rising share of elderly is seen as a threat to educational spending. We offer an analysis of spending in child care, primary and lower secondary education, and care for the elderly related to the size of young and old...

The tax structure is important for the income distribution and therefore a key playground for redistributive politics. The standard theory assumes that more unequal income distribution will create a majority for more redistribution (Meltzer and Richard). This study investigates the empirical...

The paper investigates the relationships between costs and user charges in the sewage industry in Norwegian local governments. The purpose of the analysis is to answer the following questions: (i) To what extent is a higher unit cost passed on to consumers in terms of a higher user charge? (ii)...

Capitalization of the property tax is of particular interest in Norway since many local governments decide not to have a property tax. We apply a rich data set of housing transactions and characteristics for three years (1997–1999) and combine them with local government-level data about...

This paper provides an empirical test of a principal tenet of fiscal federalism: that spending discretion, when granted to localities, leads to public-sector heterogeneity, with public-good levels adjusting to suit local demands. The test is based on a simple model of partial fiscal...

The paper performs an efficiency analysis of the lower secondary school sector in Norway. The efficiency potential is calculated to 14 percent based on a DEA analysis with grades in core subjects (adjusted for student characteristics and family background) as outputs. The analysis of the...

The aim of this note is to show that the fiscal illusion model of Wallace Oates unambiguously predicts a flypaper effect. The original contribution does not reach this result because equal increases in the lump-sum grant and the income of the median voter are compared. When the correct...

The constitutional choice between single-purpose and multi-purpose authorities is analyzed in a model describing the local decision-making process as a game between a sponsor, representing the voters, and two bureaus. The bureaus are able to influence public decisions by using private...

When investigating the effects of federal grants on the behavior of lower-level governments, it is hard to defend the handling of grants as an exogenous factor affecting local governments; federal governments often set grants based on characteristics and performance of local governments. In this...

Fiscal discipline is a concern because of possible spending and deficit bias in fiscal and political institutions. This study investigates adjustments under fiscal federalism, concentrating on decentralized government in Denmark and allowing for a comparison with neighbors Norway and Sweden and...