There are two main forms of government in US cities: council-manager and mayor-council. This paper develops a theory of fiscal policy determination under these two forms. The theory predicts that expected public spending will be lower under mayor-council but that either form of government could be favored by a majority of citizens. The latter prediction means that the theory is consistent with the coexistence of both government forms. Support for the former prediction is found in both a cross-sectional analysis and a panel analysis of changes in government form. (JEL H11, H72, R51)
Coate, Stephen, and Brian Knight.
"Government Form and Public Spending: Theory and Evidence from US Municipalities."
American Economic Journal: Economic Policy,
Structure, Scope, and Performance of Government
State and Local Budget and Expenditures
Finance in Urban and Rural Economies