New Evidence on Fiscal Decentralization and the Size of Government

This paper adds to the literature by utilizing improved data on tax revenue decentralization to re-examine the relationship between fiscal decentralization and the size of government. An econometric analysis using panel data from 18 OECD countries shows that fiscal decentralization matters for both the size and composition of government spending. Tax revenue decentralization is associated with a smaller public sector, while expenditure decentralization is associated with a larger public sector. The former effect seems to be driven by a reduction in social security transfers, while the latter effect seems to be driven by increased government consumption.fiscal federalism, sub-central fiscal autonomy, government expenditures, size of government

Welfare Competition in Norway

Local redistribution policy creates incentives for welfare migration that may result in 'underprovision' or even a 'race to the bottom'. This paper evaluates the empirical importance of welfare competition. Our contribution is to separate between the policy decision and the actual welfare benefit payments and to introduce income distribution as a determinant of welfare policy. Utilizing spatial econometric methods we find statistical significant strategic interaction between local governments for both the welfare benefit norm decided by the local council and the expected welfare benefits of a standardized person. No robust relationship is found between inequality and welfare benefits and thus we offer no strong support for the Romer-Meltzer-Richard hypothesis. We conclude that there is a geographic pattern in welfare benefits. This does not necessarily imply underprovision, since the grant financing of the local governments may generate overall excessive public spending.

Mechanical and Psychological Effects of Electoral Reform

Duverger (1954) noted that changes in electoral systems will have two types of effects: mechanical effects, and reactions of political agents in anticipation of these, which he referred to as psychological effects. It is complicated to empirically separate the two effects since these occur simultaneously. In this paper we use a large set of counterfactual election outcomes to address this issue. Our application is based on a nationwide municipal electoral reform in Norway, which changed the seat allocation method from d’Hondt to modified Sainte-Lagüe. Even though this electoral reform is of a relatively small magnitude, we document substantial psychological effects.

Does the Housing Market React to New Information on School Quality?

This paper analyzes housing market reactions to the release of previously unpublished information on school quality. Using the sharp discontinuity in the information environment allows us to study price changes within school catchment areas, thus controlling for neighborhood unobservables. We find a substantial housing market reaction to publication of school quality indicators, suggesting that households care about school quality, and may be willing to pay for better schools. The publication effect is robust to a number of sensitivity checks, but does not seem to be permanent as prices revert to prepublication levels after two to three months. We discuss this reversion in relation to the literature on behavioral finance and the concept of limited attention.valuation of school quality, hedonic methods, price reversion

Property Taxation as a Determinant of School District Efficiency

Recent theoretical contributions have emphasized the favorable incentive effects of property taxation. The object of this paper is to confront these theories with Norwegian data on student performance. The institutional setting in Norway is well suited to analyzing the effects of property taxation because we can compare school districts with and without property taxation. In addition, we focus on an alternative incentive mechanism - competition between school districts. The empirical results indicate that students in school districts that levy residential property taxes perform better at the national examination than students in comparable school districts. Strategic interaction in school quality is present, but the magnitude of the interaction effect is modest.Student achievement;efficiency;property taxation;competition;spatial auto-regressive model

Decentralization with Property Taxation to Improve Incentives: Evidence from Local Governments’ Discrete Choice

Decentralization of government with property tax financing is the standard recipe for public sector reform. Fiscal competition is assumed to stimulate efficiency and hold down the tax level. Property taxation offers additional incentives for efficiency. We study the incentive mechanisms involved using data for decentralized governments and in a setting where they can choose to have property taxation or not. The empirical analysis addresses whether fiscal competition and political control problems influence the choice of having property taxation. The results indicate that both incentive mechanisms are relevant and consequently support the standard advice. Fiscal competition generates a distinct geographic pattern in local taxation and political fragmentation seems to motivate property taxation to control common pool problems. The main methodological challenge handled concerns spatial interaction with discrete choice.property taxation; fiscal competition; political fragmentation; Bayesian analysis; spatial autoregressive model

Causal Effects of Paternity Leave on Children and Parents

In this paper we use a parental leave reform directed towards fathers to identify the causal effects of paternity leave on children’s and parents’ outcomes. We document that paternity leave causes fathers to become more important for children’s cognitive skills. School performance at age 16 increases for children whose father is relatively higher educated than the mother. We find no evidence that fathers’ earnings and work hours are affected by paternity leave. Contrary to expectation, mothers’ labor market outcomes are adversely affected by paternity leave. Our findings do therefore not suggest that paternity leave shifts the gender balance at home in a way that increases mothers’ time and/or effort spent at market work.parental leave, labor supply, child development

Voting when the Stakes are High

Rational choice theories of electoral participation stress that an individual's decision to vote depends on her expected net benefit from doing so. If this instrumental motive is relevant, then turnout should be higher in elections where more is at stake. We test this prediction, by studying how turnout is affected by exogenous variation in governments’ financial flexibility to provide pork for their voters. By utilizing simultaneous elections for different offices, we identify a positive effect of election stakes on turnout.voter motivation, elections, turnout

Do re-election probabilities influence public investment?

We identify exogenous variation in incumbent policymakers’ re-election probabilities and explore empirically how this variation affects their investments in physical capital. Our results indicate that a higher re-election probability leads to higher investments, particularly in the purposes preferred more strongly by the incumbents. This aligns with a theoretical framework where political parties disagree about which públic goods to produce using labor and predetermined public capital

Mami Fujiwara, Diderot et le droit d’auteur avant la lettre: autour de la «Lettre sur le commerce de la librairie»

L’autore esamina la posizione assunta da Diderot, nella Lettre sur le commerce de la librarie, ma non solo, in merito a ciò che più tardi si chiamerà proprietà letteraria e diritto d’autore. Dopo aver ricordato su quali basi giuridiche operavano gli editori e gli stampatori dell’epoca, ed aver esaminato la posizione assunta al riguardo da Diderot, l’autore è costretto, un po’ suo malgrado, a riconoscere che Diderot è perfettamente d’accordo con gli editori dell’epoca: un’opera intellettuale è..