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http://ssrn.com/abstract=949007
 
 

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Federal, State, and Local Governments: Evaluating Their Separate Roles in US Growth


Matthew John Higgins


Georgia Institute of Technology - Scheller College of Business; National Bureau of Economic Research (NBER)

Andrew T. Young


West Virginia University - College of Business and Economics

Daniel Levy


Bar-Ilan University - Department of Economics; Emory University - Department of Economics; Rimini Center for Economic Analysis

November 2006

Emory Public Law Research Paper No. 07-4
Emory Law and Economics Research Paper No. 07-5
Bar Ilan Univ. Pub Law Working Paper No. 06-8

Abstract:     
We use new US county level data (3,058 observations) from 1970 to 1998 to explore the relationship between economic growth and the size of government at three levels: federal, state and local. Using 3SLS-IV estimation we find that the size of federal, state and local government all either negatively correlate with or are uncorrelated with economic growth. We find no evidence that government is more efficient at more or less decentralized levels. Furthermore, while we cannot separate out the productive and redistributive services of government, we document that the county-level income distribution became slightly wider from 1970 to 1998. Our findings suggest that a release of government-employed labor inputs to the private sector would be growth-enhancing.

Number of Pages in PDF File: 26

Keywords: Economic Growth, Federal Government, State Government, Local Government, Fiscal Federalism, Oates' Decentralization Theorem, County-Level Data

JEL Classification: O40, O11, O18, O51, R11, H50, H70

working papers series


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Date posted: December 4, 2006  

Suggested Citation

Higgins, Matthew John and Young, Andrew T. and Levy, Daniel, Federal, State, and Local Governments: Evaluating Their Separate Roles in US Growth (November 2006). Emory Public Law Research Paper No. 07-4; Emory Law and Economics Research Paper No. 07-5; Bar Ilan Univ. Pub Law Working Paper No. 06-8. Available at SSRN: http://ssrn.com/abstract=949007 or http://dx.doi.org/10.2139/ssrn.949007

Contact Information

Matthew John Higgins (Contact Author)
Georgia Institute of Technology - Scheller College of Business ( email )
800 West Peachtree Street
Atlanta, GA 30308
United States
404-894-4368 (Phone)
404-894-6030 (Fax)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Andrew T. Young
West Virginia University - College of Business and Economics ( email )
P.O. Box 6025
Morgantown, WV 26506
United States
3042934526 (Phone)
Daniel Levy
Bar-Ilan University - Department of Economics ( email )
Ramat-Gan, 5290002
Israel
+972 3 531-8345 (Phone)
+972 3 738-4034 (Fax)
HOME PAGE: http://econ.biu.ac.il/en/levy

Emory University - Department of Economics ( email )
1602 Fishburne Drive, Suite 306
Rich Building
Atlanta, GA 30322-0001
United States
HOME PAGE: http://economics.emory.edu/home/people/faculty/Levydaniel.html
Rimini Center for Economic Analysis ( email )
Via Patara, 3
Rimini (RN), RN 47900
Italy
HOME PAGE: http://www.rcfea.org/
Feedback to SSRN


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