Capital-Intensive Projects Induce More Effort Than Labor-Intensive Projects

Central governments often subsidize capital spending by local governments, instead of subsidizing operating expenses or labor-intensive projects. This paper offers one explanation, focusing on the incentive effects for local officials--a local official can more easily shift the cost of optimizing a project to his successor on a labor-intensive project than on a capital-intensive project.

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Year of publication:	2008-12
Authors:	Glazer, Amihai ; Proost, Stef
Institutions:	Department of Economics, University of California-Irvine
Subject:	Federalism \| Capital subsidies \| Transit subsidies

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 080913 13 pages longages
Classification:	H77 - Intergovernmental Relations; Federalism ; H71 - State and Local Taxation, Subsidies, and Revenue ; L92 - Railroads and Other Surface Transportation: Autos, Buses, Trucks and Water Carriers
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004970914