This study investigates the role of fiscal advisors in maintaining government fiscal discipline when the advisor’s appointment is determined endogenously. Our theoretical model shows that an incumbent politician has an incentive to employ an external advisor as a commitment device for fiscal...

We examine the welfare effects of a central government's subsidy for a local public good in a Nash equilibrium model with two types of public goods. We first show that the welfare effect depends on the substitution and evaluation effects. We also investigate the optimal subsidy rate in a...