Public debt, migration, and shortsighted politicians

Christian Schultz, Tomas Sjöström

Research output: Contribution to journalArticlepeer-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 languageEnglish (US)
Pages (from-to)655-674
Number of pages20
JournalJournal of Public Economic Theory
Volume6
Issue number5
DOIs
StatePublished - Dec 1 2004
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Finance
  • Sociology and Political Science
  • Economics and Econometrics

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