Public debt, migration, and shortsighted politicians

Christian Schultz; Tomas Sjöström

doi:10.1111/j.1467-9779.2004.00185.x

Public debt, migration, and shortsighted politicians

Christian Schultz, Tomas Sjöström

Research output: Contribution to journal › Article › peer-review

13 Scopus citations

Abstract

We analyze amodel where local public debt levels are set by politicians who are chosen in local elections. Migration causes an externality across districts, and leads to overaccumulation of local public debt. Since debt is a strategic substitute, the median voters in each district prefer shortsighted political leaders who "borrow and spend," thereby exacerbating the problem of overaccumulation of local public debt.

Original language	English (US)
Pages (from-to)	655-674
Number of pages	20
Journal	Journal of Public Economic Theory
Volume	6
Issue number	5
DOIs	https://doi.org/10.1111/j.1467-9779.2004.00185.x
State	Published - Dec 1 2004
Externally published	Yes

All Science Journal Classification (ASJC) codes

Finance
Sociology and Political Science
Economics and Econometrics

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10.1111/j.1467-9779.2004.00185.x

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abstract = "We analyze amodel where local public debt levels are set by politicians who are chosen in local elections. Migration causes an externality across districts, and leads to overaccumulation of local public debt. Since debt is a strategic substitute, the median voters in each district prefer shortsighted political leaders who {"}borrow and spend,{"} thereby exacerbating the problem of overaccumulation of local public debt.",

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AB - We analyze amodel where local public debt levels are set by politicians who are chosen in local elections. Migration causes an externality across districts, and leads to overaccumulation of local public debt. Since debt is a strategic substitute, the median voters in each district prefer shortsighted political leaders who "borrow and spend," thereby exacerbating the problem of overaccumulation of local public debt.

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Public debt, migration, and shortsighted politicians

Abstract

All Science Journal Classification (ASJC) codes

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