This paper compares the power and size of both spatial one-directional and robust to local misspecification LM test using Monte Carlo techniques under different set ups. Confirming the results found in Anselin et al. (1996), under local misspecification the robust LM test improves its size and...

The article tests an extended version of Meltzer and Richard's model where the redistributive policy of the government is made through in kind transfer. The median-voter of one region decides the size of the government of her region taking into account the expenditures made by neighbours'...