Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall...
-
Upload
syahlan-g-atjeh -
Category
Documents
-
view
219 -
download
0
Transcript of Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall...
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 1/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe
CHAPTER
24
The Federal System o
!o"ernment
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 2/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-2
The Federal System ofThe Federal System of
GovernmentGovernment Federal system o #o"ernmentFederal system o #o"ernment
!o"ernment made $% o many le"els!o"ernment made $% o many le"els
Federal #o"ernmentFederal #o"ernment To% le"el &n ederal systemTo% le"el &n ederal system
Econom&cs o ederal system:Econom&cs o ederal system:
'es&rab&l&ty o a ederal system'es&rab&l&ty o a ederal system Econom&c &nteract&ons amon# #o"ernmentsEconom&c &nteract&ons amon# #o"ernments
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 3/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-3
The Theoretical FoundationsThe Theoretical Foundations
of Federalismof Federalism Econom&es o ScaleEconom&es o Scale
Coord&nat&on o Lar#e Pro#ramsCoord&nat&on o Lar#e Pro#rams
P$bl&c !oodsP$bl&c !oods E(ternal&t&esE(ternal&t&es
O%t&mal Shar&n# !ro$%O%t&mal Shar&n# !ro$%
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 4/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-4
Intergovernmental CompetitionIntergovernmental Competition
and Consumer Choiceand Consumer Choice '&erent #o"ernments can s$%%ly o'&erent #o"ernments can s$%%ly o
"ar&ety o %$bl&cly %ro"&ded #oods"ar&ety o %$bl&cly %ro"&ded #oods
Better sat&sy demands o aBetter sat&sy demands o ahetero#eneo$s %o%$lat&onhetero#eneo$s %o%$lat&on
Many local #o"ernments sat&s&es "ar&edMany local #o"ernments sat&s&es "ar&ed
demand or local %$bl&c #oodsdemand or local %$bl&c #oods
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 5/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-5
Intergovernmental CompetitionIntergovernmental Competition
and Consumer Choiceand Consumer Choice
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 6/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-6
o!ility and Intergovernmentalo!ility and Intergovernmental
CompetitionCompetition Many #o"ernments allo) c&t&*ens to +"oteMany #o"ernments allo) c&t&*ens to +"ote
)&th the&r eet,)&th the&r eet, In other )ords- ree to mo"e to anotherIn other )ords- ree to mo"e to another
.$r&sd&ct&on that better sat&s&es the&r.$r&sd&ct&on that better sat&s&es the&r
%reerences%reerences
T&ebo$t modelT&ebo$t model
Local #o"ernments com%ete or res&dentsLocal #o"ernments com%ete or res&dents Hel%s re"eal %reerences or %$bl&c sectorHel%s re"eal %reerences or %$bl&c sector
o$t%$to$t%$t
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 7/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-7
"ther Governments as a #asis"ther Governments as a #asis
for Comparisonfor Comparison !o"ernment o&c&als m$st sat&sy!o"ernment o&c&als m$st sat&sy
const&t$ents to stay &n o&ceconst&t$ents to stay &n o&ce
Many local #o"ernments allo) orMany local #o"ernments allo) orcom%ar&soncom%ar&son
Pro"&des $se$l &normat&on #&"enPro"&des $se$l &normat&on #&"en
&ncent&"es or rat&onal &#norance&ncent&"es or rat&onal &#norance
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 8/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-8
"ther Governments as a #asis"ther Governments as a #asis
for Comparisonfor Comparison Ca%&tal&*at&on &n real estate %r&cesCa%&tal&*at&on &n real estate %r&ces
creates &ncent&"es to mon&tor #o"ernmentcreates &ncent&"es to mon&tor #o"ernment
o&c&also&c&als
Many local #o"ernments createMany local #o"ernments create
+laborator&es o democracy,+laborator&es o democracy,
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 9/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-9
The Roles of $ifferent %evelsThe Roles of $ifferent %evels
of Governmentof Government Ed$cat&on &s lar#est %ort&on o state andEd$cat&on &s lar#est %ort&on o state and
local s%end&n#local s%end&n#
P$bl&c )elare &s second h&#hestP$bl&c )elare &s second h&#hest !rad$al /b$t steady0 r&se &n %$bl&c )elare!rad$al /b$t steady0 r&se &n %$bl&c )elare
s%end&n#s%end&n#
H&#h)ays ha"e allen &n &m%ortanceH&#h)ays ha"e allen &n &m%ortance
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 10/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-10
The Roles of $ifferent %evels ofThe Roles of $ifferent %evels of
GovernmentGovernment
1970 1980 1990 2000
Education 40.4% 36.1% 34.5% 34.6%
Highways 12.6% 9.0% 7.3% 6.7%Public wl!a" 11.3% 12.8% 13.2% 15.4%
#nsu"anc t"ust $nditu"s
&"ti"'nt and un'loy'nt(5.5% 6.7% 6.5% 8.2%
Halth and hositals 7.4% 8.7% 8.9% 8.5%
)tility and li*uo" sto"s 7.2% 8.4% 8.0% 7.8%
+atu"al "sou"cs 3.6% 3.3% 1.5% 1.3% 1.6% 1.7% 1.9% 1.8%
#nt"st on dbt 3.4% 4.0% 6.0% 5.5%
-th" 7.1% 9.4% 12.2% 10.2%
atgo"y
P"cntag o! /otal
E$nditu"s
ou"c utho"s calculations !"o' data in th Statistical Abstract
of the United States ,a"ious ditions.
/abl 24.1 /h P"cntag o! tat and ocal o,"n'nt
E$nditu"s in a"ious atgo"is !o" lctd a"s
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 11/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-11
Special Interests andSpecial Interests and
Government Si&eGovernment Si&e S%ec&al Interest Inl$ence the act&"&t&es oS%ec&al Interest Inl$ence the act&"&t&es o
#o"ernment#o"ernment
Federal&sm can l&m&t s%ec&al &nterestsFederal&sm can l&m&t s%ec&al &nterests Concentrates costsConcentrates costs
Increases &ncent&"es to become &normedIncreases &ncent&"es to become &normed
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 12/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-12
Centrali&ation and theCentrali&ation and the
Carteli&ation of GovernmentCarteli&ation of Government !o"ernment mon&tors ant&com%et&t&"e!o"ernment mon&tors ant&com%et&t&"e
beha"&or &n %r&"ate sectorbeha"&or &n %r&"ate sector
1nt&com%et&t&"e beha"&or &n #o"ernment1nt&com%et&t&"e beha"&or &n #o"ernment
&s .$st&&ed as:&s .$st&&ed as: El&m&nat&n# )aste$l d$%l&cat&onEl&m&nat&n# )aste$l d$%l&cat&on
Enorc&n# $n&orm standardsEnorc&n# $n&orm standards
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 13/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-13
Competition in the Pu!licCompetition in the Pu!lic
SectorSector Inter#o"ernmental com%et&t&on &m%ortantInter#o"ernmental com%et&t&on &m%ortant
&n %$bl&c sector b$t has decl&ned &n&n %$bl&c sector b$t has decl&ned &n
recent decadesrecent decades
Standard&*at&on decreasesStandard&*at&on decreases
&nter#o"ernmental com%et&t&on&nter#o"ernmental com%et&t&on
Consol&dat&on has red$ce n$mber o localConsol&dat&on has red$ce n$mber o local
#o"ernment $n&ts#o"ernment $n&ts
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 14/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-14
The 'um!er of GovernmentsThe 'um!er of Governments
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 15/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-15
Regulations and GrantsRegulations and Grants
Method or central&*&n# #o"ernmentMethod or central&*&n# #o"ernment
act&"&tyact&"&ty
State #o"ernments ree to &m%oseState #o"ernments ree to &m%ose
re#$lat&ons on local #o"ernmentsre#$lat&ons on local #o"ernments
Federal #o"ernment l&m&ted byFederal #o"ernment l&m&ted by
Const&t$t&onConst&t$t&on Ho)e"er- &m%oses r$les as a cond&t&on orHo)e"er- &m%oses r$les as a cond&t&on or
rece&"&n# #rant $nd&n#rece&"&n# #rant $nd&n#
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 16/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-16
Regulations and GrantsRegulations and Grants
!rants %ro"&de a method or ederal!rants %ro"&de a method or ederal
#o"ernment to re#$late state and#o"ernment to re#$late state and
local&t&eslocal&t&es
Lessen &nter#o"ernmental com%et&t&onLessen &nter#o"ernmental com%et&t&on
Creates more homo#eno$s localCreates more homo#eno$s local
#o"ernments#o"ernments
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 17/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-17
Intergovernmental RevenueIntergovernmental Revenue
S&#n&&cant so$rce o local #o"ernmentS&#n&&cant so$rce o local #o"ernment
re"en$ere"en$e
Occ$r beca$se:Occ$r beca$se: Local #o"ernment does not ha"e &ncent&"e toLocal #o"ernment does not ha"e &ncent&"e to
$nderta2e the %ro.ect$nderta2e the %ro.ect
Local #o"ernment does not ha"e $nds toLocal #o"ernment does not ha"e $nds to
$nderta2e the %ro.ect$nderta2e the %ro.ect
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 18/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-18
Intergovernmental RevenueIntergovernmental Revenue
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 19/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-19
Intergovernmental RevenueIntergovernmental Revenue
Can lead to cartel&*at&on o localCan lead to cartel&*at&on o local
#o"ernments#o"ernments
T)o d&st&nct ty%es o &nter#o"ernmentalT)o d&st&nct ty%es o &nter#o"ernmental
#rants:#rants: !eneral #rants!eneral #rants
Cate#or&cal #rantsCate#or&cal #rants
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 20/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-20
General GrantsGeneral Grants
Ta( re"en$es collected by h&#her3le"elTa( re"en$es collected by h&#her3le"el
#o"ernment#o"ernment !&"en to lo)er3le"el #o"ernment to s%end!&"en to lo)er3le"el #o"ernment to s%end
ho) they see &tho) they see &t
T)o .$st&&cat&ons:T)o .$st&&cat&ons: H&#her3le"el #o"ernments ha"e more re"en$eH&#her3le"el #o"ernments ha"e more re"en$e
#enerat&n# ab&l&ty#enerat&n# ab&l&ty E4$al&*at&on o re"en$es amon# #o"ernmentsE4$al&*at&on o re"en$es amon# #o"ernments
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 21/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-21
Categorical GrantsCategorical Grants
!rants made or a s%ec&&c %$r%ose!rants made or a s%ec&&c %$r%ose
!&"e #rant&n# #o"ernment some control!&"e #rant&n# #o"ernment some control
o"er e(%end&t$reo"er e(%end&t$re
Ho) m$ch de%ends on the c&rc$mstancesHo) m$ch de%ends on the c&rc$mstances Ho) m$ch )o$ld the local #o"ernment ha"eHo) m$ch )o$ld the local #o"ernment ha"e
s%ent )&tho$t the #rant5s%ent )&tho$t the #rant5
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 22/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-22
Categorical GrantsCategorical Grants
A Categorical
Grant That $iffers
from a General
Grant
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 23/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-23
atching Grantsatching Grants
Cate#or&cal #rant that re4$&res a localCate#or&cal #rant that re4$&res a local
contr&b$t&on beore the #o"ernmentcontr&b$t&on beore the #o"ernment
+matches, &t+matches, &t
!rant can be &(ed or l&m&tless!rant can be &(ed or l&m&tless
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 24/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-24
atching Grantsatching Grants
atching Grants of
a Fi(ed Amount
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 25/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-25
atching Grantsatching Grants
atching Grants)ith 'o Grant %imit
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 26/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-26
The Flypaper EffectThe Flypaper Effect
Em%&r&cally- #rants a%%ear to +st&c2 )hereEm%&r&cally- #rants a%%ear to +st&c2 )here
they land,they land,
Poss&ble e(%lanat&ons:Poss&ble e(%lanat&ons: B$d#et ma(&m&*&n# b$rea$cratsB$d#et ma(&m&*&n# b$rea$crats
Creates &ncent&"e to %$rs$e add&t&onal #rantsCreates &ncent&"e to %$rs$e add&t&onal #rants
7/23/2019 Holcombe 24 ( PUBLIC SECTOR ECONOMICS : The Role of Goverment in the American Economy Randall Holcombe)
http://slidepdf.com/reader/full/holcombe-24-public-sector-economics-the-role-of-goverment-in-the-american 27/27
PUBLIC SECTOR ECONOMICS: The Role of Government in the American Economy
Randall Holcombe 24-27
Ta( Issues and %ocalTa( Issues and %ocal
GovernmentsGovernments Ind&"&d$al and b$s&ness mob&l&ty has ta(Ind&"&d$al and b$s&ness mob&l&ty has ta(
%ol&cy &m%l&cat&ons%ol&cy &m%l&cat&ons
Ta(es %a&d by &mmob&le actorsTa(es %a&d by &mmob&le actors E(%la&ns %ro%erty ta(at&onE(%la&ns %ro%erty ta(at&on
Ca%&tal&*at&on o debtCa%&tal&*at&on o debt
Ca%&tal&*at&on o %$bl&c #oodsCa%&tal&*at&on o %$bl&c #oods 'ed$ct&b&l&ty o state and local ta(es'ed$ct&b&l&ty o state and local ta(es