Local Government Budgeting: The Econometric Comparison of Political and Bureaucratic Models / Martin Feldstein, Daniel J. Frisch.

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Feldstein, Martin

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w0207.Publication details: Cambridge, Mass. National Bureau of Economic Research 1977.Description: 1 online resource: illustrations (black and white)Online resources:

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Abstract: The current paper presents a method of deciding the question of whether any given stage in the budget process is an example of the "political" or the "bureaucratic" model. We then use it to study local government spending on education. The basis for our method is the important difference between the effect of intergovernmental aid that is implied by the political budget model and by the bureaucratic budget model. According to the bureaucratic model, the effect of inter-governmental aid on each category of educational input (e.g., teachers' salaries, books, etc.) depends only on the change in total educational spending induced by the aid and not on the type of aid that causes the change in spending. In contrast, the political budget model implies that the overall expenditure increase is the result of separate decisions on each of the expenditure categories and that the changes in these expenditure categories will depend on the form of the intergovernmental aid. Our method of exploiting this difference is presented in detail below.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w0207 (Browse shelf(Opens below))	Not For Loan

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October 1977.

The current paper presents a method of deciding the question of whether any given stage in the budget process is an example of the "political" or the "bureaucratic" model. We then use it to study local government spending on education. The basis for our method is the important difference between the effect of intergovernmental aid that is implied by the political budget model and by the bureaucratic budget model. According to the bureaucratic model, the effect of inter-governmental aid on each category of educational input (e.g., teachers' salaries, books, etc.) depends only on the change in total educational spending induced by the aid and not on the type of aid that causes the change in spending. In contrast, the political budget model implies that the overall expenditure increase is the result of separate decisions on each of the expenditure categories and that the changes in these expenditure categories will depend on the form of the intergovernmental aid. Our method of exploiting this difference is presented in detail below.