We apply Becker's (1983) model of political interest groups to state mandates on public expenditures and revenues of local governments. We outline conditions under which interest groups increase localities' output levels above the efficient level but political pressure at the state level will reduce spending toward the efficient level. An implication of our model is that political lobbying at the local level occurs only because of its indirect effects on state-mandated outcomes. Because the state ultimately decides the government service level, interest groups' payoffs to lobbying at the state level generally will exceed those at the local level.
|Number of pages||15|
|Journal||Journal of Public Economics|
|State||Published - Mar 1989|
Bibliographical noteFunding Information:
*We gratefully acknowledge financial support from the National Science Foundation (Grant no. RII-8610671) and the Commonwealth of Kentucky through the EPSCoR Program. We thank the participants of the 1988 Public Choice Meetings, the 1988 Meetings of the Western Economics Association, and the Microeconomics Workshop at the University of Kentucky for their comments. We also thank Paul Anglin, Mark Toma, and two referees for helpful comments. ‘See table 93. ‘Restrictions on State and Local Government Tax and Expenditures Powers’, in Advisory Commission on Intergovernmental Relations (1985, pp. 147-149).
ASJC Scopus subject areas
- Economics and Econometrics