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Fiscal
Crises in the US Cities: Structural
and Non-Structural Causes
-- Guntram
B Wolff
Financial
difficulties of the US cities have recently become a major
issue of concern. However, there is little agreement on why
certain cities experience crises while others do not. Two
arguments are put forward: Cities suffer from: (1) structural
problems like high immigration, congestion, etc.; and (2)
non-structural political problems like the weakness of the
mayor, union-power, etc. Starting from a common pool model
of municipal goods we estimate demand equations for spending
and debt with structural variables. The estimation is based
on 900 US cities in 1985, 1991 and 1999. Structural factors
predicted by the model explain most of the variation of spending
and debt levels. Furthermore coefficients are stable over
time. However, excessively high debt burdens as indicators
of potential crisis and high spending levels are outliers
and not explained by structural factors.
©
2008 IUP. All Rights Reserved.
The Tax-Spend Debate: Time Series Evidence from Sarawak Municipals,
1975-2003
-- Muzafar
Shah Habibullah and A M Dayang-Affizzah
This
paper is concerned with the issue of the intertemporal relationship
between revenues and expenditures and the way in which a State
Government manages public deficits. In this study, different
hypotheses are considered to examine such a problem. The so-called
tax-spend hypothesis postulates that government raises tax
revenues ahead of engaging in new expenditures (Buchanan and
Wagner, 1978; and Friedman,1978). The spend-tax hypothesis,
on the other hand, predicts that government first spends and
then increases tax revenues to finance their expenditures
(Barro, 1974; and Peacock and Wiseman, 1979). There is also
the fiscal synchronization hypothesis which suggests that
government takes simultaneous decisions about revenues and
expenditures (Musgrave, 1966; and Meltzer and Richard, 1981).
Lastly, there is independence regarding the decisions to spend
and raise revenues (Baghestani and McNown, 1994). Using the
annual data on revenues and expenditures for the 22 municipals
in Sarawak for the period 1975-2003, the cointegration and
vector error correction model analyses suggest that the results
are at best mixed.
©
2008 IUP . All Rights Reserved.
Foreign
Direct Investment in India During the Post-Liberalization
Period
-- S
Rameshkumar and V Alagappan
This
paper examines the trends and patterns in the Foreign Direct
Investment (FDI) inflows into India during the post-liberalization
period. The study shows that the actual inflow of the FDI
into the Indian economy had maintained a fluctuating and unsteady
trend during the study period. It is found that the approvals
had been slow in materializing themselves into actual inflows.
©
2008 IUP . All Rights Reserved.
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