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Public Goods and Ethnic Divisions
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In this article, the authors present a model that links heterogeneity of preferences across ethnic groups in a city to the amount and type of public goods the city supplies, and conclude that ethnic conflict is an important determinant of local public finances.Abstract:
We present a model that links heterogeneity of preferences across ethnic groups in a city to the amount and type of public good the city supplies. We test the implications of the model with three related datasets: US cities, US metropolitan areas, and US urban counties. Results show that productive public goods -- education, roads, libraries, sewers and trash pickup -- in US cities (metro areas/urban counties) are inversely related to the city's (metro area's/county's) ethnic fragmentation, even after controlling for other socioeconomic and demographic determinants. Ethnic fragmentation is negatively related to the share of local spending on welfare. The results are mainly driven by observations in which majority whites are reacting to varying sizes of minority groups. We conclude that ethnic conflict is an important determinant of local public finances.read more
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References
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A Pure Theory of Local Expenditures
TL;DR: The authors show that the Musgrave-Samuelson analysis, which is valid for federal expenditures, need not apply to local expenditures, and restate the assumptions made by Musgrave and Samuelson and the central problems with which they deal.
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The truly disadvantaged : the inner city, the underclass, and public policy
TL;DR: Wilson's "The Truly Disadvantaged" as mentioned in this paper was one of the sixteen best books of 1987 and won the 1988 C. Wright Mills Award of the Society for the Study of Social Problems.
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Africa's Growth Tragedy: Policies and Ethnic Divisions
William Easterly,Ross Levine +1 more
TL;DR: This article showed that ethnic diversity helps explain cross-country differences in public policies and other economic indicators in Sub-Saharan Africa, and that high ethnic fragmentation explains a significant part of most of these characteristics.
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A Rational Theory of the Size of Government
Allan H Meltzer,Scott F. Richard +1 more
TL;DR: In a general equilibrium model of a labor economy, the size of government, measured by the share of income redistributed, is determined by majority rule as mentioned in this paper, where voters rationally anticipate the disincentive effects of taxation on the labor-leisure choices of their fellow citizens and take the effect into account when voting.