|
EconStor >
Max Planck Institute for Research on Collective Goods, Bonn >
Preprints of the Max Planck Institute for Research on Collective Goods >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/26954
|
| | |
| Title: | | Size, spillovers and soft budget constraints  |
| Authors: | | Crivelli, Ernesto Staal, Klaas |
| Issue Date: | | 2008 |
| Series/Report no.: | | Preprints of the Max Planck Institute for Research on Collective Goods 2008,17 |
| Abstract: | | There is much evidence against the so-called too big to fail hypothesis in the case of bailouts to subnational governments. We look at a model where districts of different size provide local public goods with positive spillovers. Matching grants of a central government can induce so-cially-efficient provision, but districts can still exploit the intervening central government by induc-ing direct financing. We show that the ability and willingness of a district to induce a bailout and district size are negatively correlated. We also discuss the effect economies of scale in local public goods provision has on the bailout policies and argue that these policies can be subgame perfect equilibrium strategies. |
| Subjects: | | bailouts soft-budget constraints district size spillovers |
| JEL: | | H4 H7 R1 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Preprints of the Max Planck Institute for Research on Collective Goods
|
| Files in This Item:
| |
|
| No. of Downloads:
| |
| last Month |
last 3 Month |
total |
|
|
|
|
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/26954
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|