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Local Intergovernmental Competition and the Law of 1/ n
Author(s) -
Crowley George R.
Publication year - 2015
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.4284/0038-4038-2013.075
Subject(s) - economics , competition (biology) , leviathan (cipher) , offset (computer science) , politics , government (linguistics) , empirical research , public economics , competition law , local government , state (computer science) , panel data , distributive property , law and economics , microeconomics , public administration , political science , law , econometrics , monopoly , computer science , ecology , linguistics , philosophy , mathematics , epistemology , algorithm , pure mathematics , biology , programming language , computer security
This article proposes an empirical framework based on a synthesis of the seminal “Law of 1/ n ” and “Leviathan” theories, which models the relationship between government spending and the number of jurisdictions in a federal system as determined by the interplay of the costs related to centralized government (which fall as the number of jurisdictions increases) and the costs of distributive politics (which rise as the number of jurisdictions increases). Using a panel of U.S. state and local government spending data, empirical tests based on this combined framework show that the effect of intergovernmental competition predicted by the Leviathan model is partially offset by the Law of 1/ n . This result helps explain the inconsistent findings in the previous empirical literature.