Capitalization of the property tax is of particular interest in Norway since many local governments decide not to have a property tax. We apply a rich data set of housing transactions and characteristics for three years (1997–1999) and combine them with local government-level data about...

The paper provides an analysis of efficiency in the care for the elderly sector in Norway. In a first step, we perform DEA analysis to calculate the degree of efficiency in each municipality and the national level efficiency potential. The analysis reveals substantial variation in efficiency...

This paper provides an empirical test of a principal tenet of fiscal federalism: that spending discretion, when granted to localities, allows public-good levels to adjust to suit local demands. The test is based on a simple model of partial fiscal decentralization, under which earmarking of...

The paper analyzes the intertemporal spending behavior of Norwegian local governments with particular attention to liquidity constraints imposed by balanced-budget rules. The main findings are: (i) On average, local government spending behavior is neither perfectly forward looking nor fully...

The paper performs an efficiency analysis of lower secondary schools in Norway. The efficiency potential is calculated as 14%, based on a DEA analysis with grades in core subjects (adjusted for student characteristics and family background) as outputs. The analysis of the determinants of...

The aim of this note is to show that the fiscal illusion model of Wallace Oates unambiguously predicts a flypaper effect. The original contribution does not reach this result because equal increases in the lump-sum grant and the income of the median voter are compared. When the correct...

The constitutional choice between single-purpose and multi-purpose authorities is analyzed in a model describing the local decision-making process as a game between a sponsor, representing the voters, and two bureaus. The bureaus are able to influence public decisions by using private...