Suchergebnisse

This paper examines how local governments adjust their spending, savings and taxes in response to a temporary revenue windfall generated by a housing boom and how they cope with the inevitable shortfall that appears during the bust. We focus on Spanish local governments given the intensity of the last housing boom-bust experienced there and the large share of construction-related revenues they obtain. We find, first, that just a small share of the boom windfall was saved, with revenues being used primarily to increase spending (above all, current spending) and (to a lesser extent) to cut taxes. Second, we find that the failure to save during the boom is higher in places with less informed voters and more contested elections. Third, we also examine the what happens during the bust, and find that these governments had to cut abruptly their spending (above all, capital), raise taxes, and allow deficits to grow. Finally, in places wit less informed voters and more contested elections local governments had more trouble in adjusting during the bust, and they tend to rely more on spending cuts than on tax increases.

This paper examines how local governments adjust their spending, savings and taxes in response to a temporary revenue windfall generated by a housing boom and how they cope with the inevitable shortfall that appears during the bust. We focus on Spanish local governments given the intensity of the last housing boom-bust experienced there and the large share of construction-related revenues they obtain. We find, first, that just a small share of the boom windfall was saved, with revenues being used primarily to increase spending (above all, current spending) and (to a lesser extent) to cut taxes. Second, we find that the failure to save during the boom is higher in places with less informed voters and more contested elections. Third, we also examine the what happens during the bust, and find that these governments had to cut abruptly their spending (above all, capital), raise taxes, and allow deficits to grow. Finally, in places wit less informed voters and more contested elections local governments had more trouble in adjusting during the bust, and they tend to rely more on spending cuts than on tax increases.

This paper examines how local governments adjust their spending, savings and taxes in response to a temporary revenue windfall generated by a housing boom and how they cope with the inevitable shortfall that appears during the bust. We focus on Spanish local governments given the intensity of the last housing boom-bust experienced there and the large share of construction-related revenues they obtain. We find, first, that just a small share of the boom windfall was saved, with revenues being used primarily to increase spending (above all, current spending) and (to a lesser extent) cut taxes. Second, we find that the failure to save during the boom is higher in places with less informed voters and more contested elections. Third, we also examine what happens during the bust, and find that these governments had to cut abruptly their spending (above all, capital), raise taxes, and allow deficits to grow. Finally, in places wit less informed voters and more contested elections local governments had more trouble in adjusting during the bust, and they tend to rely more on spending cuts than on tax increases.

Despite interest in the impact of land use regulations on housing construction and housing prices, little is known about the drivers of these policies. The conventional wisdom holds that homeowners have an influence on restrictive local zoning. In this paper, we contend that the party controlling local government might make a major difference. We draw on data from a large sample of Spanish cities for the 2003-2007 political term and employ a regression discontinuity design to document that cities controlled by left-wing parties convert much less land from rural to urban uses than is the case in similar cities controlled by the right. The differences between governments on the two sides of the political spectrum are more pronounced in places with greater population heterogeneity and in those facing higher housing demand. We also present some results suggesting these partisan differences might ultimately impact on housing construction and housing price growth.

Despite interest in the impact of land use regulations on housing construction and housing prices, little is known about the drivers of these policies. The conventional wisdom holds that homeowners have an influence on restrictive local zoning. In this paper, we contend that the party controlling local government might make a major difference. We draw on data from a large sample of Spanish cities for the 2003-2007 political term and employ a regression discontinuity design to document that cities controlled by left-wing parties convert much less land from rural to urban uses than is the case in similar cities controlled by the right. The differences between governments on the two sides of the political spectrum are more pronounced in places with greater population heterogeneity and in those facing higher housing demand.

We study the inter-temporal spending behavior of Spanish local governments during the last housing boom (1997-2006), a period of substantial short-run momentum in housingconstruction revenues. We argue that the unprecedented growth in these revenues might be one of the reasons underlying the increase in the sensitivity of local government spending to (predictable) revenue changes. To detect evidence of this, we study whether local spending decisions are consistent with forward-looking behavior, working within the framework provided by Holtz-Eakin et al. (1994). Our principal findings are: (i) Local spending shows substantial sensitivity to predictable changes in revenues, suggesting that Spanish local governments did not behave as fully forward-looking agents. (ii) The departure from this benchmark was much higher in those years and/or in those housing markets in which the housing boom was most intense. (iii) The sensitivity was not as great to changes in housing construction revenues as it was to changes in ordinary revenues, but this distinction became blurred as the boom intensified.

We analyze whether local land supply is influenced by the degree of political competition, and interpret the findings as being indicative of the influence wielded by land development lobbies. We use a new database including both political and land supply data for more than 2,000 Spanish municipalities for the period 2003-2007. In Spain, land use policies are largely a local responsibility with municipalities having periodically to pass compre- hensive land use plans. The main policy variable in these plans, and the one analyzed here, is the amount of land classified for potential development. We measure local political competition as the margin of victory of the incumbent government. We instrument this variable using the number of votes obtained by parties represented in local government when standing at the first national legislative elections following the re-establishment of democracy, and the number of votes they actually obtained regionally at the national legislative elections. The results indicate that stiffer political competition does indeed reduce the amount of new land designated for development. This effect is found to be most marked in suburbs, in towns with a high percent of commuters and homeowners, and in municipalities governed by the left.

We analyze whether local land supply is influenced by the degree of political competition, and interpret the findings as being indicative of the influence wielded by land development lobbies. We use a new database including both political and land supply data for more than 2,000 Spanish municipalities for the period 2003-2007. In Spain, land use policies are largely a local responsibility with municipalities having periodically to pass comprehensive land use plans. The main policy variable in these plans, and the one analyzed here, is the amount of land classified for potential development. We measure local political competition as the margin of victory of the incumbent government. We instrument this variable using the number of votes obtained by parties represented in local government when standing at the first national legislative elections following the re-establishment of democracy, and the number of votes they actually obtained regionally at the national legislative elections. The results indicate that stiffer political competition does indeed reduce the amount of new land designated for development. This effect is found to be most marked in suburbs, in towns with a high percent of commuters and homeowners, and in municipalities governed by the left.

We examine the economic and political determinants of decisions taken by local governments regarding the amount of new land to be assigned for development. The analysis draws on a massive database, which includes more than 2,000 Spanish municipalities during the 1999-2003 term-of-office. The increase in developable land in this period is explained using a wide set of variables that capture the specific traits of each municipality in 1999. The variables were selected following a review of recommendations made in the literature on urban growth controls and by taking into account other factors that might be considered specific to Spain. Our results show that urban expansion is influenced by a variety of factors. Thus, the communities found to be expanding most: (i) are rich, (ii) have more new housing purchasers, (iii) are in a weak financial position, (iv) are controlled by parties to the right of the political spectrum, (v) have a low electoral turnout and local government bodies that do not face serious electoral competition, and (vi) have more land but a lower proportion of environmentally valuable land.

This paper looks for empirical evidence on spillovers occurring between central cities and their suburbs, both on the fiscal side and on the growth of population and output. To test these hypotheses we specify a dynamic model with population and output both in the central city and in the suburbs as endogenous variables and with fiscal variables in the central city and in the suburbs as covariates. The model is estimated with a panel of data of twenty-eight metropolitan areas in Spain for the period 1992-2001.The main findings are that the capital stock in the central city promotes growth both in the city and in the suburbs. Also, higher growth in the central city translates into higher long run growth in the suburbs. These results are indicative of the potential welfare gains of both, concentrating financial resources in the central city, and of the implementation of existing proposals of metropolitan consolidation.