Expansionary zoning and the strategic behaviour of local governments
EntityUAM. Departamento de Economía y Hacienda Pública
PublisherTaylor and Francis
10.1080/00343404.2019.1634801Regional Studies 54.3 (2020): 388 - 402
ISSN0034-3404 (print); 1360-0591 (online)
SubjectsCournot competition; land-use conversion; local governments; local land supply; spatial econometrics; Economía
NoteThis is an Accepted Manuscript version of the following article, accepted for publication in Regional Studies 54.3 (2020): 388 - 402. It is deposited under the terms of the Creative Commons Attribution-NonCommercial License (http://creativecommons.org/licenses/by-nc/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited
Rights© 2020 Taylor and Francis
Esta obra está bajo una licencia de Creative Commons Reconocimiento-NoComercial 4.0 Internacional.
This paper analyses the extent to which local land supply is the result of strategic interaction among nearby local governments. In a setting of limited tax instruments to raise revenues and interjurisdictional competition for mobile residents, municipal authorities are provided with the economic incentives to convert land from rural to urban uses, hence promoting urban growth. Using data on a large sample of Spanish municipalities for the period 2003–11 and a modified Cournot-style competition model, we report evidence in support of this hypothesis. The results suggest that local incumbents do not make policy decisions in isolation, and reaction functions arise because the mobile tax base reacts to the regulatory measures that modify land uses in each municipality
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