Working Paper
Spending within limits: Evidence from municipal fiscal restraints
Abstract: This paper studies the role of a constitutional rule new to the literature: a limit placed by a city on its own ability to tax or spend. We find that such a limit exists in at least 1 in 8 cities, and that limits are not adopted in response to high levels of or variability in taxation. After limit adoption, municipal revenue growth declines by 16 to 22 percent. Our results suggest that institutional constraints may be effective when representative government falls short of the median voter ideal.
Access Documents
File(s): File format is text/html http://www.federalreserve.gov/pubs/feds/2012/201252/201252abs.html
File(s): File format is application/pdf http://www.federalreserve.gov/pubs/feds/2012/201252/201252pap.pdf
Bibliographic Information
Provider: Board of Governors of the Federal Reserve System (U.S.)
Part of Series: Finance and Economics Discussion Series
Publication Date: 2012
Number: 2012-52