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:	Centrum voor Economische Studiën, Faculteit Economie en Bedrijfswetenschappen

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Series:	Center for Economic Studies - Discussion papers.
Type of publication:	Book / Working Paper
Language:	English
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005503872