Working Paper: NBER ID: w14857
Authors: Stephen Coate; Brian Knight
Abstract: There are two main forms of government in U.S. cities: council-manager and mayor-council. This paper develops a theory of fiscal policy determination under these two forms. The theory predicts that expected public spending will be lower under mayor-council, but that either form of government could be favored by a majority of citizens. The latter prediction means that the theory is consistent with the co-existence of both government forms. Support for the former prediction is found in both a cross-sectional analysis and a panel analysis of changes in government form.
Keywords: government form; public spending; U.S. municipalities
JEL Codes: D7; H7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| mayor-council form (H70) | expected public spending (H59) |
| council-manager form (H70) | expected public spending (H59) |
| switching to mayor-council form (H79) | municipal spending as a fraction of GDP (H70) |