This study has clearly confirmed a link between the amount of compensation a city pays its workers and the financial stability of that city. The more a municipality pays its workers relative to other local governments, the greater the chance that city will experience fiscal stress. The...

Researchers have typically ignored the determinants of the tax structure of the public sector. Political scientists have concentrated their analyses on the expenditure side of the public ledgers while economists have avoided the issue by assuming that taxes are exogenously determined. In this...