This paper analyzes municipal expenditures in the light of horizontal fiscal interactions. I investigate total expenditures and a set of non-earmarked expenditure subcategories in the largest German federal state, North Rhine-Westphalia (NRW). The empirical analysis is based on a Spatial Durbin...

We present evidence that more ethnically fragmented communities spend, all else equal, more on police services than less fragmented communities. We introduce a model of spending on police services which we use to interpret the data. In this model, we assume that the decision to commit a crime is...

This paper measures the causal effect of coalition vs. single-party governments on fiscal policies using a data set of 396 municipalities in the German state of North Rhine-Westphalia in the time period 1985-2004. Using a regression discontinuity design to take the endogeneity of the type of...