Working Paper: NBER ID: w11203
Authors: Robert P. Inman
Abstract: The macro-economic and micro-economic evidences makes a persuasive case for cities as important centers for productive efficiency, innnovation, and economic growth. For cities to achieve their full economic potential, however, complementary public services are required. This paper reviews the arguments and the evidence for the efficient financing and governance of city public services. Against the criterion of efficiency, city services should be limited to those services valued by city residents; financing should assign residential taxes to residential services and business land taxes and fees to business services; and city governance should foster competition and choice.
Keywords: No keywords provided
JEL Codes: H11; H7; R38; R51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| efficient governance and financing structures (G38) | economic benefits for residents and firms (R38) |
| efficient governance and financing structures (G38) | land values (R52) |
| mismanagement of city finances (H74) | reduced economic efficiency and attractiveness of the city (R11) |
| mismanagement of city finances (H74) | decline in population and income levels (R23) |
| high public spending without corresponding benefits (H59) | decline in city land values (R33) |
| poverty spending (H53) | land values (R52) |
| appropriate mix of taxation (H29) | firm profitability (L21) |
| efficient city finances (R51) | efficient private economies (D61) |