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Local Infrastructures and Externalities: Does the Size Matter?

Author

Listed:
  • Massimiliano Ferraresi

    (University of Ferrara, Italy)

  • Umberto Galmarini

    (University of Insubria, Italy)

  • Leonzio Rizzo

    (University of Ferrara, Italy)

Abstract

We setup a model in which the residents of two neighboring municipalities can use the services provided by public infrastructures located in both jurisdictions. If services are either complements or substitutes in use, the municipalities strategically interact when investing in infrastructures; moreover, when they differ in population size, the small municipality reacts more to the expenditure of its neighbor than the big one. The theoretical predictions are then tested by estimating the determinants of the stock of public infrastructures of the municipalities belonging to the Autonomous Province of Trento, in Italy.

Suggested Citation

  • Massimiliano Ferraresi & Umberto Galmarini & Leonzio Rizzo, 2014. "Local Infrastructures and Externalities: Does the Size Matter?," Working papers 14, Società Italiana di Economia Pubblica.
    • Handle: RePEc:ipu:wpaper:14
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    More about this item

    Keywords

    local public goods spillovers; spatial interactions; size of local jurisdictions;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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