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

The paper presents an empirical test of local fiscal competition in Norway based on the observation that interregional migration during the business cycle creates very different incentives for rural and urban municipalities to influence population movements. Panel-data evidence is presented...