I develop and test a new explanation for the variation in slack resource levels. That explanation is based on the "ratcheting" dynamic, or the claim that government budgets expand because past overspending is impounded in future budgeted expenditures. I test the salience of the ratcheting...

Local governments tend to keep large amounts of slack nancial resources to hedge against risk and uncertainty. To date, there has been little empirical research on whether those slack holdings are inadequate, adequate, or perhaps excessive relative to those risks and uncertainties. I address...