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IFAU - Institute for Evaluation of Labour Market and Education Policy Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2007:22:
Strategic competition in Swedish local spending on childcare, schooling and care for the elderly

Karin Edmark ()

Abstract: This study tests for strategic competition in public spending on childcare and primary education, and care for the elderly, using panel data on Swedish municipalities over 1996-2005. The high degree of decentralization in the organization of the public sector implies that Swedish data is highly suitable for this type of study. The study is not limited to interactions in the same type of expenditure, but also allows for effects across expenditures. The results give no robust support for the hypothesis that municipalities react on the spending policy of neighbouring municipalities in the decision on own spending on care of the elderly, childcare and education.

Keywords: Strategic interactions; spatial econometrics; decentralization; local public spending; (follow links to similar papers)

JEL-Codes: C31; H72; H77; (follow links to similar papers)

38 pages, October 8, 2007

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