Politics vs economics: evidence from municipal annexation

Article Abstract:

A unified model of economic and political choice was developed to explore the economic and political factors involved in suburban annexation decisions in major US cities. This study employed a median voter model of municipal government behavior to explain the economic and political tradeoffs inherent in annexation decisions. An estimating equation was generated and applied to tract level census data for metropolitan areas adjacent to 29 major US cities in the 1950s. This data set features special information on city boundary shifts that facilitate a more precise differentiation between suburban and city behavior. Findings revealed that both economic and political factors influence government behavior. The desire of cities to expropriate suburban tax base was not a motivation for annexation although cities reacted to other economic factors. Meanwhile, minimizing political and racial effects of urban migration motivated annexation.

Suburbs, Political planning, Annexation (Municipal government)

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Tax exporting, regional economic growth, and welfare

Article Abstract:

The efforts of states to boost their economic growth and welfare by introducing tax schemes that allocate higher burden on out-of-state residents have long been a controversial issue in state fiscal relations. A nonlinear six-region, seven-sector, four-factor general equilibrium model was developed to theoretically and empirically examine the long-run exporting and importing of regional taxes. The empirical assessment involved the investigation of the relationships between tax exporting and three aggregate measures of regional change. Findings indicate that the ability of states to implement tax structures that impose more of burden on out-of-state residents does not automatically help in regional economic growth and welfare. Moreover, it was found that evaluation of tax policy based on its ability to contribute to economic growth may confound if regional welfare is the major objective.

Regional economics, State taxation

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The qualitative economics of development control

Article Abstract:

Space supply restrictions and containment policies are considered for a monocentric urban model with several classes. Results concern the qualitative effects of such policies on space values and locations of the various classes, but do not consider any externality or public good associated with the exercise of development controls. An increase of space accessible to a particular class results in reduced rents at all sites if there are no containment policies.

Analysis, City planning, Urban planning, Limited-growth policy, Limited growth policy

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