Centrality and Capital Costs in Urban AreasPolicy Watch for Spain

  1. MARÍA CADAVAL SAMPEDRO
  2. ALBERTO VAQUERO GARCÍA
Revista:
Hacienda Pública Española / Review of Public Economics

ISSN: 0210-1173

Ano de publicación: 2023

Número: 244

Páxinas: 57-78

Tipo: Artigo

DIALNET GOOGLE SCHOLAR lock_openAcceso aberto editor

Outras publicacións en: Hacienda Pública Española / Review of Public Economics

Resumo

For decades the discussion on the local public services in urban areas pivoted on the advantages and disadvantages of central cities. Their effects are difficult to measure and mitigate, the benefits are debatable although the literature proposes a set of answers. Some of these options have been adopted in practice through different economic policy measures that spark a debate. This paper is the first to collect a survey with the different positions regarding the costs and benefits of centrality and it also provides a policy watch of economic policy measures that have been put into practice in Spain.

Referencias bibliográficas

  • Agnew, J. (2014), Place and politics, Routledge Library Editions, Political Geography.
  • Altshuler, R. and Goodspeed, T. (2002), “Follow the Leader? Evidence on European and U.S. tax competition”, Departmental Working Papers 2002/26, Rutgers University, New Jersey. https://doi.org/ 10.1177/10911421145277.
  • Bahl, R. (2010), “Financing metropolitan cities”, Local Government Finance: The Challenges of the 21 st Century, United Nations Human Settlements Programme (UN-Habitat) the City of Barcelona and Province of Barcelona.
  • Baicker, K. (2001), “Government decision-making and the incidence of federal mandates”, Journal of Public Economics, 82:147-194. https://doi.org/10.1016/S0047-2727(00)00149-3.
  • Baicker, K. (2005), “The spillover effects of state spending”, Journal of Public Economics, 89: 529-544. https://doi.org/10.1016/j.jpubeco.2003.11.003.
  • Besley, T. and Case, A. (1995), “Incumbent behaviour:vote-seeking, tax-setting and yardstick competition”, American Economic Review, 85: 25-44. https://www.princeton.edu/~accase/downloads/Incum bent_Behavior.pdf.
  • Besley. T. and Coate, S. (2003), “Centralized versus decentralized provision of local public goods: a political economy approach”, Journal of Public Economics, 87: 2611-2637. https://doi.org/10.1016/ S0047-2727(02)00141-X.
  • Blankart, C. and Borck, R. (2005), “Local Public Finance, Handbook and Public Finance” in Backhaus and Wagner, E. (eds.), Handbook of Public Finance, Springer, Boston, 441-476. http://www.untag-smd. ac.id/files/Perpustakaan_Digital_2/PUBLIC%20FINANCE%20Handbook%20of%20Public%20 Finance%20(2004,%20Springer).pdf.
  • Bosch, N. and Solé-Ollé, A. (2005), “On the relationship between authority size and the costs of providing local services: lessons for the design of intergovernmental transfers in Spain”, Public Finance Review, 33(3): 343-384. https://journals.sagepub.com/doi/10.1177/1091142104272708.
  • Bosch, N., Espasa, M. and Montolio, D. (2010), “Estimación de los costes de centralidad y capitalidad de las grandes ciudades españolas”, Informe IEB sobre federalismo fiscal en España, 10, Institut d’Economía de Barcelona, Universidad de Barcelona. https://ieb.ub.edu/wp-content/uploads/2011/06/ Bosch.pdf.
  • Boskin, M. J. (1973), “Local Government Tax and Product Competition and the Optimal Provision of Public Goods”, Journal of Political Economy, 81(1): 203-210. https://www.jstor.org/stable/183 7337.
  • Bradbury, K. and Zhao, B. (2009), “Measuring Non-School Fiscal Disparities Among Municipalities”, National Tax Journal, 62 (1): 25-56. https://www.jstor.org/stable/41790628.
  • Brainard, W. and Dolbear, F. T. (1967), “The possibility of oversupply of local ‘public’ goods, a critical note”, Journal of Political Economy, 75: 86-90. https://www.journals.uchicago.edu/doi/10.1086/259241.
  • Brenner, N. (2002), “Decoding the newest «metropolitan regionalism» in the USA: A critical overview”, Cities, 19: 3-21. https://doi.org/10.1016/S0264-2751(01)00042-7.
  • Brett, C. and Pinske, J. (2000), “The determinants of municipal tax rates in British Columbia”, Canadian Journal of Economics, 33: 695-714.
  • Brueckner, J. (2003), “Strategic interaction among governments: an overview of empirical studies”, International Regional Science Review, 26(2): 175-188. https://doi.org/10.1177/01600176022509.
  • Brueckner, J. (2007), “Urban growth boundaries: An effective second-best remedy for unpriced traffic congestion”, Journal of Housing Economics, 16(3-4): 263-273.
  • Brueckner, J., Kahn, M. and Lin, G. (2021), “A New Spatial Hedonic Equilibrium in the Emerging Workfrom-Home Economy?”, Technical Report, National Bureau of Economic Research 2021. https://www. nber.org/papers/w28526.
  • Bruegmann, R. (2005), Sprawl: A compact history, University of Chicago.
  • Buchanan, J. (1965), “An Economic Theory of Clubs”, Economica, 32: 1-14. https://www.jstor.org/stable/ 2552442.
  • Cadaval, M. (2011), “La capitalidad ¿Un coste de centralidad? Estudio de un caso”, Investigaciones regionales, 20: 51-72. https://investigacionesregionales.org/es/article/la-capitalidad-un-coste-de-centra lidad-estudio-de-un-caso/.
  • Caramés, L. and Cadaval, M. (2008), Costes de capitalidad. Estudio de un caso: Santiago de Compostela, Universidad de Santiago de Compostela.
  • Case, A., Rosen, H. and Hines, J. (1993), “Budget spillovers and fiscal policy interdependence: Evidence from the states”, Journal of Public Economics, 52(3): 285-307. https://doi.org/10.1016/0047- 2727(93)90036-S.
  • Chernick, H. (2002), The Effect of Commuters on the Fiscal Cost of the District of Columbia, Hunter College, New York University, mimeo.
  • Chernick, H. and Reschovsky, A. (2013), “The Fiscal Health of U.S. Cities”, Lincoln Institute of Land Policy, Working Paper. https://www.lincolninst.edu/publications/working-papers/fiscal-health-us-ci ties.
  • Chernick, H. and Reschovsky, A. (2020), “Measuring the fiscal health of U.S. Cities”, Working Paper WP20HC1, Lincoln Institute of Land Policy, July. https://www.lincolninst.edu/sites/default/files/pub files/chernick_wp20hc1.pdf.
  • Chernick, H. and Tkachera, O. (2002), “The Commuter Tax and the Fiscal Cost of Commuters in New York City”, State Tax Notes, 25(6): 451-456. https://papers.ssrn.com/sol3/papers.cfm?abstract_id= 321081.
  • Cox, W. and Utt, J. (2004), “The Cost of Sprawl Reconsidered: What the Data Really Show”, Backgrounder 1770, The Heritage Foundation. https://www.heritage.org/report/the-costs-sprawl-reconsideredwhat-the-data-really-show.
  • Davies, D. (1965), “Financing urban functions and services” in Robinson O. Everett and Richard H. Leach, Urban Problems and Prospects, Dobbs Ferry, New York: 127-161.
  • Delventhal, M., Kwon, E. and Parkhomenko, A. (2022), “How Do Cities Change When We Work from Home?”, Journal of Urban Economics, 127: 103331. https://www.andrii-parkhomenko.com/files/1-s 2.0-S0094119021000139-main%20-2-.pdf.
  • De Mello, L. and Lago Peñas, S. (2013), “Local Government Cooperation for Joint Provision: The Experiences of Brazil and Spain with Intermunicipal Consortia”, in S. Lago-Peñas and J. Martínez-Vázquez (eds.), The Challenge of Local Government Size, (Cheltenham: Edgar Elgar), 221-241.
  • Figlio, D. N., Kolpin, V. W., and Reid, W. E. (1999), “Do states play welfare games?”, Journal of Urban Economics, 46(3): 437-454. https://doi.org/10.1006/juec.1999.2131.
  • Figlio, D. and O’Sullivan, A. (2002), “The Local Response to Tax Limitation Measures: Do Local Governments Manipulate Voters to Increase Revenues?”, The Journal of Law and Economics, 44(1): 233-257.
  • Foucalt, M., Madies, T. and Paty, S. (2007), “Public spending interactions and local politics. Empirical evidence from French municipalities”, Public Choice, 137: 57-80. https://link.springer.com/article/10. 1007/s11127-008-9312-z.
  • Gill, I., and Goh, C. (2010), “Scale Economies and Cities”, The World Bank Research Observer, 25(2): 235-262. https://www.jstor.org/stable/40891375.
  • Giuliano, G., Kang, S. and Yuan, Q. (2019), “Agglomeration economies and evolving urban form”, The Annals of Regional Science, 63: 377-389. https://link.springer.com/content/pdf/10.1007/s00168-019- 00957-4.pdf.
  • Glaeser, E. and Gottlieb, J. (2009), “The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States”, Journal of Economic Literature, 47(4): 983-1028. https://www.jstor.org/ stable/40651531.
  • Gordon, R. H. (1983), “An optimal taxation approach to fiscal federalism”, Quarterly Journal of Economics, 98: 567-586.
  • Greene, K., Neenan, W. and Scott, C. (1974), Fiscal interactions in a metropolitan area, Lexington Books, Lexington.
  • Greene, K., Neenan, W. and Scott, C. (1976), “Fiscal Incidence in the Washington Metropolitan Area”, Land Economics, 52(1): 13-31.
  • Greene, R. and Reschosky, A (1994), “Fiscal assistance to municipal governments”, Dollars and Sense: Policy Choices and the Wisconsin Budget, Vol. III, Donal Nichols, eds. Madison: Robert M. LaFollette Institute of Public Affairs, University of Wisconsin-Madison.
  • Hamidi, S. and Ewing, R. (2014), “A longitudinal study of changes in urban sprawl between 2000 and 2010 in the United States”, Landscape and Urban Planning, 128: 72-82. https://doi.org/10.1016/j.land urbplan.2014.04.021.
  • Hamidi, S., Ewing, R., Preuss, I. and Dodds, A. (2015), “Measuring sprawl and its impacts: An update”, Journal of Planning Education and Research, 35(1): 35-50. 10.1177/0739456X14565247.
  • Haughwout, A. F. (1999), “Regional Fiscal Cooperation in Metropolitan Areas: An Exploration”, Journal of Policy Analysis and Management, 18: 579-600. https://www.jstor.org/stable/3325756.
  • Haughwout, A. F. and Inman, R. P. (2002), “Should Suburbs Help Their Central City?”, Brookings-Wharton papers on Urban Affairs, 45-94. https://www.jstor.org/stable/25067385.
  • Hawkins, B. and Ihrke, D. (1999), “Re-examining the Suburban Exploitation Thesis in American Metropolitan Areas”, The Journal of Federalism, 29: 109-121. https://www.jstor.org/stable/3331112.
  • Heyndels, B. and Vuchelen, J. (1998), “Tax mimicking among Belgian municipalities”, National Tax Journal, 51(1): 89-101. https://www.jstor.org/stable/41789314.
  • Hortas Rico, M. (2014), “Urban sprawl and municipal budgets in Spain: a dynamic panel data analysis”, Papers in Regional Science, 93(4): 843-864. https://doi.org/10.1111/pirs.12022.
  • Hortas Rico, M. and Salinas, P. (2014), “Determinación de la escala mínima eficiente en la provision de bienes públicos locales. Evidencia para los municipios españoles”, Revista de Economía Aplicada, 22(66): 35-65. https://www.redalyc.org/pdf/969/96932962002.pdf.
  • Hortas Rico, M. and Solé-Ollé, A. (2010), “Does urban sprawl increase the costs of providing local public services? Evidence from Spanish Municipalities”, Urban Studies, 47(7): 1513-1540. https://doi. org/10.1177/004209800935362.
  • Kahn, M. E. (2010), “New evidence on Trends in the cost of Urban Agglomeration”, NBER Chapters, Agglomeration Economics, Edward Glaeser, 339-354. https://www.nber.org/books-and-chapters/ag glomeration-economics/new-evidence-trends-cost-urban-agglomeration.
  • Kahn, M. E. and Walsh, R. (2015), “Cities and the Environment”, Handbook of Regional and Urban Economics, 5: 405-465. https://doi.org/10.1016/B978-0-444-59517-1.00007-6.
  • Kwon, E. (2021), “What will Become of Our Cities if Workfrom-home Truly Becomes the New Normal? COVID-19, Working from Home and the Future of Cities”, IEB Report 1/2021, 11-13.
  • Ladd, H. and Bradburry, K. (1988), “City Taxes and Property Tax Bases”, National Tax Journal, 4: 50-523.
  • Ladd, H. and Yinger, J. (1989), American Ailing Cities, Fiscal Health and the Design of Urban Policy, The Johns Hopkins University Press, Baltimore, and London.
  • Ladd, H. F., Reschoysky, A. and Yinger, J. (1991), “City fiscal condition and state equalizing aid: the case of Minnesota”, Proceedings of the Annual Conference on Taxation Held under the Auspices of the National Tax Association-Tax Institute of America, 84: 42-49, National Tax Association.
  • Lefèvre, C. (2009), Gouverner les métropoles, Paris, LGDJ-Dexia.
  • Litman, T. (2003), “Measuring transportation: Traffic, mobility and accessibility”, Institute of Transportation Engineers Journal, 73(10): 28-32.
  • Margolis, J. (1957), “Municipal Fiscal Structure in Metropolitan Area”, Journal of Political Economy, 65(3): 225-236.
  • Murdoch, J., Rahmatian, M. and Thayer, M. (1993), “A Spatially Autoregressive Median Voter Model of Recreation Expenditures”, Public Finance Quarterly, 21: 334-350. https://doi.org/10.1177/ 1091142193021003.
  • Musgrave, R. (1939), “The Voluntary Exchange Theory of Public Economy”, The Quarterly Journal of Economics, 53(2): 213-237. https://doi.org/10.2307/1882886.
  • Musgrave, R. (1959), The Theory of Public Finance, McGraw-Hill, New York.
  • Neenan, W. (1970), “The suburban-central city exploitation thesis: one city’s tale”, National Tax Journal, 23: 17-139.
  • Oates, W. (1972), Fiscal Federalism, Harcourt Brace Jovanovich, New York.
  • Oates, W. (2005), “Toward a Second-Generation Theory of Fiscal Federalism”, International Tax and Public Finance, Netherland, 12: 349-373. https://link.springer.com/article/10.1007/s10797-005-1619-9.
  • Ouazad, A. (2020), “Resilient Urban Housing Markets: Shocks vs. Fundamentals,” CIRANO Working Papers 2020s-53, CIRANO October. https://cirano.qc.ca/en/summaries/2020s-53.
  • Pauly, M. (1970), “Optimality, ‘public’ goods and local governments, a general theoretical analysis”, Journal of Political Economy, 78: 572-585. https://www.jstor.org/stable/1829652.
  • Pierre, J. (1999), “Models of urban governance. The institutional dimension of urban politics”, Urban Affairs Review, 34(3): 372-396. https://doi.org/10.1177/107808799221839.
  • Redoano, M. (2007), “Fiscal interactions among European countries”, CSGR Working Paper 222/07. https://www.cesifo.org/en/publications/2007/working-paper/fiscal-interactions-among-europeancountries-does-eu-matter.
  • Rojas, E., Cuadrado-Roura, J. R. and Fernández-Güell, J. M. (ed.) (2008), Governing the Metropolis. Principles and Cases, Inter-American Development Bank, Cambridge.
  • Rosenthal, S. and Strange, W. (2001), “The determinants of agglomeration”, Journal of Urban Economics, 50(2): 191-229. https://doi.org/10.1006/juec.2001.2230.
  • Rosenthal, S. and Strange, W. (2020), “How Close Is Close? The Spatial Reach of Agglomeration Economies”, Journal of Economic Perspectives, 34(3): 27-49. https://www.aeaweb.org/articles?id= 10.1257/jep.34.3.27.
  • Rusk, D. (2006), “Annexation and the Fiscal Fate of Cities”, The Brookings Institution.
  • Sacher, S. B. (1993), “Fiscal Fragmentation and the Distribution of Metropolitan Area Resources: A Case Study”, Urban Studies, 30(7): 1225-1239. https://www.jstor.org/stable/43196012.
  • Savitch, H. V. and Vogel, R. K. (2009), “Regionalism and urban politics”, J. S. Davies and D. L. Imbroscio (eds.), Theories of urban politics, Second edition, Sage, London, 106-124.
  • Sharpe, L. J and Newton, K. (1984), “Does Politics Matter? The Determinants of Public Policy”, American Political Science Review, 80(3): 1088-1089.
  • Slack, E. (2010), “Provincial-Local Fiscal Transfers in Canada: Provincial Control Trumps Local Accountability” in Kim, J., Lotz, J. and Mau, N. J. (eds.), General Grants versus Earmarked Grants: Theory and Practice, Korea Public Finance Institute and the Danish Ministry of Interior and Health: Copenhagen: 318-344.
  • Slack, E. (2011), “Financing Large Cities and Metropolitan Areas”, IMFG Papers on Municipal Finance and Governnace, 3, University of Toronto. https://imfg.munkschool.utoronto.ca/uploads/3/financing_ large_cities_and_metropolitan_areas_wp3.pdf.
  • Slack, E. (2016), International Comparison of Global City Financing. A Report to the London Finance Commission, Institute on Municipal Finance and Governance, University of Toronto. https://www. london.gov.uk/sites/default/files/03_international_comparison_of_global_city_financing_october_ 2016.pdf.
  • Slack, E., Tassonyi, A. and Grad, D. (2015), “Fiscal health of Ontario large cities: Is there something to worry about? In Is your city healthy? Measuring urban fiscal health”, (ed.) Bird, R. and Slack, Is your city healthy? Measuring Urban Fiscal Health, Toronto: Institute on Municipal Finance and Governance, Munk School of Global Affairs, University of Toronto, 149-99
  • Smith, R. (1972), “Are nonresidents contributing their share to core city revenues”, Land Economics, 48: 240-247. https://doi.org/10.2307/3145146.
  • Solé-Ollé, A. (2001), “Determinantes del gasto público local: ¿Necesidades de gasto o capacidad fiscal?”, Revista de Economía Aplicada, IX(25): 115-116. https://www.redalyc.org/articulo.oa?id=969 17680005.
  • Solé-Ollé, A. (2006), “Expenditure spillovers and fiscal interactions: empirical evidence from localgovernments in Spain”, Journal of Urban Economics, 59: 32-56. https://doi.org/10.1016/j.jue.2005. 08.007.
  • Solé-Ollé, A. and Polo Otero, J. (2008), Propuesta de cálculo de compensación de costes derivado de la capitalidad compartida de Santa Cruz de Tenerife, Institut d’Economía de Barcelona, Universidad de Barcelona.
  • Suárez-Pandiello, J., Bosch. N., Pedraja, F., Rubio, J. J. and Utrilla, A. (2008), La financiación local en España: Radiografía del presente y propuestas de futuro, FEMP, Madrid. http://femp.femp.es/files/ 566-578-archivo/HACIENDAS%20LOCALES%20RADIOGRAFIA.pdf.
  • Tiebout, C. M. (1956), “A pure theory of local expenditures”, Journal of Political Economy, 64: 416-424.
  • Tomàs, M. (2017), “Explaining Metropolitan Governance. The Case of Spain”, Raumforsch Raumordn, 5: 243-252. https://doi.org/10.1007/s13147-016-0445-0.
  • Turley, G., Flannery, D. and McNena, S. (2015), “A Needs and Resources Assessment of Fiscal Equalisation in the Irish Local Government System”, The Economic and Social Review, 46(3): 459-484, Autumn. https://www.esr.ie/article/view/402.
  • Vicent, P. (1971), “The fiscal impact of commuters”, in Werner Hirsch et al., Fiscal Pressures on the Central City: The Impact of Commuters, Nonwhites and Overlapping Governments. Praeger, New York.
  • Voith, R. (1993), “Changing Capitalization of CBD-Oriented Transportation Systems: Evidence from Philadelphia, 1970-1988”, Journal of Urban Economics, 33(3): 361-376. https://doi.org/10.1006/ juec.1993.1021.
  • Voith, R. (2002), “Do suburbs need cities?”, Journal of Regional Science, 38(3): 445-464. https://doi. org/10.1111/0022-4146.00102.
  • Wasylenko, M. (2017), “Financing central cities; the economics underlying fiscal strategy options”, Center for policy research, Syracuse university, Paper 204. https://surface.syr.edu/cpr/236/.
  • Wilson, J. D. (1999), “Theories of tax competition”, National Tax Journal, 52: 269-304. https://www. journals.uchicago.edu/doi/10.1086/NTJ41789394.
  • Yan, Y. and Reschovsky, A. (2021), “Fiscal disparities among local governments in Zhejiang Province, China”, Journal of Urban Affairs, 1-22. https://doi.org/10.1080/07352166.2020.1851138.
Fonte de datos: Dialnet