Public sector activities are often neglected in economic approaches to analyze the driving forces of urban growth and changes in urban hierarchies. One crucial aspect of public sector activities is the institutional status of cities as regional capital. The paper is reporting on a quasi natural...

This volume includes five self-contained chapters in the fields of public debt and fiscal transfer schemes. After an introduction to the topic, chapter 2 shows that the institutional setting of fiscal policy making needs to be considered when assessing the sustainability of fiscal policy. Using...

German municipalities have substantial autonomy in setting taxes on two distinct tax bases: business profits and property values. We use this setting and a two-step approach to explore whether implemented tax policy is consistent with the seminal inverse-elasticity rule. First, we estimate the...

In this paper we take a "market-based" approach to examine whether increased school expenditures are valued by potential residents and whether the current level of public school provision is inefficient. We do so by employing an instrumental variables strategy to estimate the effect of state...

The literature on corporate social performance (CSP) is largely split between approaches that consider CSP to be extrinsically driven and those that consider it to be intrinsically driven. While some studies in the management literature have paid attention to drivers of both types, the...

States differ substantially in higher education policies. Little is known about the effects of state policies on the performance of public colleges and universities, largely because no clear measures of college quality exist. In this paper, I estimate the average quality of public colleges of...

The sales tax is assumed to be regressive as those with higher incomes spend a smaller portion of their incomes. This conclusion is based on the presumption that the sales tax is a broad-based consumer tax and that consumers bear the burden of the tax. In practice, the tax is neither broad-based...

In many Swiss cantons, new government programs must be approved by a referendum of citizens before money can be spent. Referendums seem like a natural way to address citizen-legislator agency problems, yet statistical evidence on how referendums affect spending decisions is almost nonexistent....

Standard agency theory suggests that rational voters will vote to re-elect politicians who deliver favorable outcomes. A second implication is that rational voters will not support a politician because of good outcomes unrelated to the politician's actions. Specifically, rational voters should...

We provide the first empirical analysis of gubernatorial pay. Using US data for 1950-90 we document, contrary to widespread assumptions, substantial variation in the wages of politicians, both across states and over time. Gubernatorial wages respond to changes in state income per capita and...