Working Paper Series,
Uppsala University, Department of Economics

Abstract: In this paper we investigate the extent to which local government consumption in Sweden is determined by permanent rather than current resources. Evidence from a panel of municipalities indicates that most consumption (90-95 percent) is associated with permanent resources. That is, spending decisions on non-durable goods and services in Swedish municipalities are to a very high degree determined by rational, forward looking decision makers. This result contrasts sharply with the common view that local governments do not act intertemporally. One policy implication is that it might be difficult for the central government to conduct stabilization policy by influencing the municipalities' current resources.

Keywords: Local government consumption; Intertemporal decision making

JEL-codes: D99; H72

29 pages, September 23, 1996

Download statistics

Published as

Matz Dahlberg and Tomas Lindström, (1998), 'Are Local Governments Governed by Forward Looking Decision Makers? An Investigation of Spending Patterns in Swedish Municipalities', Journal of Urban Economics, vol 44, pages 254-271

• Uppsala University, Department of Economics
• Home page for this series

Questions (including download problems) about the papers in this series should be directed to Ulrika Öjdeby ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:uunewp:1996_020This page generated on 2024-09-13 22:17:36.