Borge, Lars-Erik; Brueckner, Jan K.; Rattsø, Jørn - 2012 - revised August 2012
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...
