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The Adoption of Constitutional Home Rule: A Test of Endogenous Policy Decentralization

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  • Jessica Hennessey

    (Department of Economics, Furman University, 3300 Poinsett Highway, Greenville, SC 29613, USA.)

Abstract

Home rule reduced control by the state legislature and gave municipalities the option of self-chartering and the ability to independently determine their desired structure and functions. Fiscal federalism theory suggests that decentralization of power is more likely when there is heterogeneity across local governments. The theory is empirically tested by considering municipal-level demand for home rule, measured by predicting a latent taste for home rule. The evidence indicates states that adopted constitutional home rule had stronger and more heterogeneous municipal-level preferences. This paper highlights the importance of considering both within and across state heterogeneity in the endogenous determination of institutions.

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  • Jessica Hennessey, 2016. "The Adoption of Constitutional Home Rule: A Test of Endogenous Policy Decentralization," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 42(3), pages 441-463, June.
    • Handle: RePEc:pal:easeco:v:42:y:2016:i:3:p:441-463
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    Cited by:

    1. Libman, Alexander, 2009. "Constitutions, Regulations, and Taxes: Contradictions of Different Aspects of Decentralization," MPRA Paper 15854, University Library of Munich, Germany.

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