紀要論文

Incentives for improving the public budget balance in local governments and resident migration

eng

09111247

https://doi.org/10.15002/00007875

Journal of International Economic Studies

25

63

80

2011-03

Version of Record

This paper examines the incentives for local governments to improve their own fiscal balances in an environment of inter-regional resident migration, and shows that whether a local government chooses to make its fiscal balances efficient depends on the condition of popula-tion distribution. Since residents migrate between regions in the pursuit of higher utility, their utility will become equal at a migration equilibrium. We obtain the following results from this property of resident migration: a local government in a country with two regions will improve its own fiscal balance efficiently when the utility of residents in the other region increases with emigration from there. If the residents’ utility in the other region decreases, the local gov-ernment will have an incentive to deteriorate its own fiscal balance. However, residents’ utility will not decrease under this deterioration.

Article

AA10459262