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The political economy of fixed regional public expenditure shares with an illustration for Belgian railway investments

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  • Proost, Stef
  • Zaporozhets, Vera

Abstract

Many local public goods are allocated by federal governments using fixed regional shares: every region is entitled a fixed share of the total budget for a particular type of public good. This paper explores two characteristics of this type of allocation. First, it shows that this type of allocation is relatively efficient as it puts a strict budget constraint on the decisive region. Second, we show that these fixed shares can be an equilibrium of different legislative bargaining processes. The working of the fixed sharing rules is illustrated for the allocation of railway investments in Belgium.

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  • Proost, Stef & Zaporozhets, Vera, 2013. "The political economy of fixed regional public expenditure shares with an illustration for Belgian railway investments," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 808-815.
    • Handle: RePEc:eee:regeco:v:43:y:2013:i:5:p:808-815
    DOI: 10.1016/j.regsciurbeco.2013.08.001
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    References listed on IDEAS

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    Cited by:

    1. De Borger, Bruno & Proost, Stef, 2016. "Can we leave road pricing to the regions? -The role of institutional constraints," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 208-222.
    2. Alban Thomas & Vera Zaporozhets, 2017. "Bargaining Over Environmental Budgets: A Political Economy Model with Application to French Water Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(2), pages 227-248, October.

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    More about this item

    Keywords

    Local public goods; Political economy; Railways;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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