Luisa Dörr prepared this study while she was working at the ifo Center for Public Finance and Political Economy. The study was completed in February 2022 and accepted as doctoral thesis by the Department of Economics at the University of Munich. It consists of three distinct empirical essays...

A cooperative bargaining model is adapted to the setting of local government in Norway. Aggregate consumption, the capital stock and net financial wealth in the local public sector are endogenized. The origin of intertia in the model is ascribed to incrementalism or adjustment costs in the...

An extended community preference model including real and financial investments is estimated on accounting time-series data for the local public sector in Norway. The estimation results indicate considerable sluggishness in local public spending, both in current expenditure and investment...

We examine how in-kind transfers provided by local governments affect economic inequality. The allocation of in-kind transfers to households and the adjustment for differences in needs are derived from a model of local government spending behavior. The model distinguishes between fixed and...

Background: China has five layers of government including the central government. Recently, some prefectural governments meet fiscal distress. Methods: We investigate the effects of urban and rural populations and area sizes on the expenditures of the prefecture-level local government by...

Without much preparation, Indonesia, in 2000, at a stroke replaced the previous system of centralized government and development planning with a wide range of decentralization programs. The reforms gave greater authority, political power, and financial resources directly to regencies and...

States merge local governments to achieve economies of scale. Little is known to which extent mergers of county-sized local governments reduce expenditures, and influence political outcomes. I use the synthetic control method to identify the effect of mergers of large local governments in...

A widespread view in the 'political budget cycles' literature is that incumbent politicians seek to influence voters' perceptions of their competence and/or preferences by using the composition of the fiscal budget as a signalling tool. However, little is known about whether voters actually...

Using a panel of 308 observations over the period 1989–1996, we analyse how Flemish municipalities react to budgetary shocks. We address two questions: whether governments respond differently to tax than to grant windfalls and whether responses to positive and negative shocks are symmetric....

A cooperative bargaining model is adapted to the setting of local government in Norway. Aggregate consumption, the capital stock and net financial wealth in the local public sector are endogenized. The origin of intertia in the model is ascribed to incrementalism or adjustment costs in the...