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作者

来源

REGIONAL SCIENCE AND URBAN ECONOMICS,Vol.72,IssueSI,P.86-102

语言

英文

关键字

Spatial correlation; Strategic interactions; Public finance; Fixed point; Numerical approximation; LOCAL-GOVERNMENTS; INTERDEPENDENCE; GROWTH; MODEL

作者单位

[Yang, Chao] Shanghai Univ Finance & Econ, Sch Econ, Shanghai, Peoples R China. [Yang, Chao] Minist Educ, Key Lab Math Econ SUFE, Shanghai, Peoples R China. [Lee, Lung-fei] Ohio State Univ, Dept Econ, 475 Arps Hall,1945 N High St, Columbus, OH 43210 USA. Yang, C (reprint author), 420 Sch Econ, 777 Guoding Rd, Shanghai 200433, Peoples R China. E-Mail: yang.chao@mail.shufe.edu.cn; lee.1777@osu.edu

摘要

We investigate interactions of public safety spending among spatially related local jurisdictions in a framework of simultaneous move game both theoretically and empirically. Incorporating the mobility of residents and externality of public safety services, it is found that the public safety spending of a municipal government can be negatively related to those of its neighbors, which is empirically supported by a general interaction model with correlated private information using the data on municipalities in North Carolina. In this case, strategic interactions induce a reduction of municipal public safety spending by 7.2404% on average and a local government will reduce its own spending by 0.0927 million dollars when one of its neighbors is expected to increase public safety spending by 1 million dollars, showing strong "free-riding" effects.