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Does local council size affect land development expenditure? Quasi-experimental evidence from Japanese municipal data

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  • Hirota, Haruaki
  • Yunoue, Hideo

Abstract

The purpose of this paper is to evaluate a fiscal common-pool problem in a Japanese local government. Especially, we focus on the relationship between council size and land development expenditure of local government using a dataset of 13,989 municipalities in Japan from FY2001 to FY2006. We deal with an identification of causal effects by applying regression discontinuity design’s framework to address problem of endogeneity bias. Our results show that land development expenditure of small municipalities induce the fiscal common-pool problem over public projects.

Suggested Citation

  • Hirota, Haruaki & Yunoue, Hideo, 2013. "Does local council size affect land development expenditure? Quasi-experimental evidence from Japanese municipal data," MPRA Paper 43723, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:43723
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    File URL: https://mpra.ub.uni-muenchen.de/43723/2/MPRA_paper_43723.pdf
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    References listed on IDEAS

    as
    1. Pettersson-Lidbom, Per, 2012. "Does the size of the legislature affect the size of government? Evidence from two natural experiments," Journal of Public Economics, Elsevier, vol. 96(3), pages 269-278.
    2. Peter Egger & Marko Koethenbuerger, 2010. "Government Spending and Legislative Organization: Quasi-experimental Evidence from Germany," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 200-212, October.
    3. Weingast, Barry R & Shepsle, Kenneth A & Johnsen, Christopher, 1981. "The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 642-664, August.
    4. Hirota, Haruaki & Yunoue, Hideo, 2012. "Local government expenditure and council size: Quasi-experimental evidence from Japan," MPRA Paper 42799, University Library of Munich, Germany.
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    Cited by:

    1. Sanz, Carlos, 2017. "The Effect of Electoral Systems on Voter Turnout: Evidence from a Natural Experiment," Political Science Research and Methods, Cambridge University Press, vol. 5(4), pages 689-710, October.

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    More about this item

    Keywords

    fiscal common-pool problem; council size; government expenditure; regression discontinuity design;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories

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