Spending caps have become popular as a means to curb public expenditure. But the effect of spending caps is unsettled both theoretically and empirically. The most thorough treatment of the issue is provided by Ferejohn and Krehbiel, who argue that it is necessary to take preferences of...

We examine whether competition from private schools improves public school performance and expenditure. It is difficult methodologically to isolate the effect of competition, but we use new measures of competition in both the public and the private school sector and a data set comprising...