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Explaining the Australian Local Government Infrastructure Expenditure Backlog: A Market Failure Approach
Author(s) -
Simmons Phil,
Dollery Brian
Publication year - 2014
Publication title -
economic papers: a journal of applied economics and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.245
H-Index - 19
eISSN - 1759-3441
pISSN - 0812-0439
DOI - 10.1111/1759-3441.12083
Subject(s) - local government , discounting , business , government (linguistics) , critical infrastructure , government failure , investment (military) , market failure , public infrastructure , urban infrastructure , public economics , transportation infrastructure , economics , finance , microeconomics , engineering , public administration , transport engineering , urban planning , political science , linguistics , philosophy , civil engineering , politics , law
Most local government systems across the developed world exhibit significant local infrastructure backlogs and A ustralian local government is no exception. While most of the scholarly literature has focused on ameliorating the problem, comparatively little effort has been expended on explaining the emergence of the local infrastructure backlogs. This paper addresses this question by employing a market failure theoretical framework to better understand gaps occurring in local government infrastructure both in A ustralia and elsewhere. We show how these gaps indicate local authorities are discounting infrastructure investment at higher rates than for local services.