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Working
Paper Series:
07.05
Piling On: Overlapping Jurisdictions & the Fiscal Common-Pool
Christopher R. Berry
http://www.harrisschool.uchicago.edu/faculty/web-pages/christopher-berry.asp
Abstract:
This paper discusses the common-pool problems that arise when multiple
territorially overlapping governments share the authority to provide services and levy
taxes in a common geographic area. Contrary to the traditional Tiebout model in which
increasing the number of competing governments improves efficiency, I argue that
increasing the number of overlapping governments results in "overfishing" from the
shared tax base. I test the model empirically using data from U.S. counties and find a
strong positive relationship between the number of overlapping jurisdictions and the size
of the local public sector. Substantively, the "overlap effect" is on the order of 5 to 25
percent of local revenue. [Originally released January 2007, revised June 2008]
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