Jeffrey I. Chapman

An Economic Model of Crime and Police: Some Empirical Results

Crime and police are two interdependent phenomena; yet, they are often analyzed separately. This paper develops a simultaneous model of crime causation, police output and demand for police and therefore incorporates this inter dependence. It was found that relative illegal wages have a strong positive influence on crime, but police activity can retard crime. Further, police labor is positively related to police output and property crimes are more important than other types of felonies in increasing the demand for police.

The impact of alternative transportation systems on urban structure

Abstract This paper extends a recent von Thunen-type model of urban structure by Mills to include two competing forms of transportation, and then compares simulated representative American and European cities with respect to size, density, and land rents. Assuming consumers minimize costs in choosing between competing travel modes, the 19-equation model demonstrates that land rent differentials are diminished by adding an alternative travel mode, and that transport capacity is far more important than fare structures in determining transit patterns and land use. American urban structure appears to resemble European urban patterns as transportation modes proliferate.

Effects of the Form of Government and Property Tax Limits on Local Finance in the Context of Revenue and Expenditure Simultaneity

This paper examines the impact of the form of government and state‐imposed property tax limits on municipal finance. We suggest that municipal revenues and expenditures are determined concurrently and estimate revenue and expenditure functions as simultaneous equations. We use the instrumental variable approach and fixed effects to address revenue and expenditure endogeneity. By testing the model on a cross‐section of rich municipal data for fiscal year 2002, we find evidence that revenues and expenditures are simultaneously determined, that potentially binding state‐imposed property tax limits effectively restrict local revenues and that the form of government is a significant predictor of local expenditures.

The Fiscalization of Land Use The Increasing Role of Innovative Revenue Raising Instruments to Finance Public Infrastructure

The fiscalization of land use—the use of land use planning and development to encourage revenue production as a first-order goal became important in the United States antitax environment of the 1980s. This article applies an application of this outlook to ways of financing public infrastructure. The article presents 17 different techniques beyond more intensive use and cash financing that help to avoid the economic and political constraints imposed by voters. These techniques illustrate the public finance creativity that the fiscalization concept engenders. Nearly all of these techniques employ debt finance instruments that do not need voter approval, and consequently, many are convoluted, arcane, and more expensive than vanilla debt issues. The article closes by discussing unintended consequences and problems.

Implications of a Land Value Tax with Error in Assessed Values

Land value taxation has numerous potential advantages compared to conventional property taxes on capital and land. The models that establish these advantages, however, are grounded in the unlikely assumption that land values are assessed without error. This paper demonstrates that levying taxes based on land values assessed with error is equivalent to the application of one tax rate to the true value of land and a different effective tax rate to capital. The model demonstrates that a land value tax will have at most the distortion effects of a property tax, even with the worst possible land value assessment errors. (JEL H21, H23)

The Demand for Police

This paper is concerned with the estimation of a demand schedule for a public service–police protection. The papers object is to determine the wage elasticity of demand for policemen, since if police demand is wage-inelastic, then police unions could have a powerful future. The paper follows a simple public choice framework by postulating a citizen utility function and income constraint in order to determine utility maximization conditions. It is shown that the quantity of policemen demanded–which was used as a proxy for police service–should be positively related to the citizens income and wealth, and negatively related to the police wage. Further, other variables such as other government expenditures, crime rates, traffic congestion, and class status were also related to the police variable. The demand equation was estimated for a pooled, cross-sectional sample of California cities. Two-stage least squares was the estimation technique. Most of the signs of the significant variables were as anticipated. Especially interesting was the result that the demand for policemen is quite wage-inelastic.

Local Fiscal Stress in Sub‐Saharan Africa: The Kenyan Example

Abstract This article identifies the fiscal weaknesses of local government in Africa, with concentration of the fiscal stress that is endemic to their condition. It then examines Kenya, as a case study in sub‐Saharan Africa. It continues to focus down on three Kenyan cities—Nairobi, Mombasa, and Kisumu, and identifies their six major revenue sources: land based revenues, regulatory revenues, income‐based taxes, service revenues, user charges, and government grants. Although some of the data is problematic, it is possible to determine several reasons for local fiscal stress. These reasons include limited access to stable financial resources, unstable national economic performance, centralized governmental control, mixed results of decentralization, and institutional and managerial weaknesses, including corruption in the collection and use of resources. Four recommendations are advanced to help these local governments: the development of local credit systems, the use of non‐governmental organizations, the clarification of the use of foreign aid, and the development of a greater capacity for governance. This articles main theoretical contribution is the development of an analytic framework for examining the reasons for fiscal stress in sub‐Saharan Africa. By examining revenue and expenditure patterns of the three localities, the article develops a data set that highlights some of the reasons for local government financial problems—the governments do not know how much revenue can be collected from a particular revenue source, they do not have records of existing sources of revenue, and they only collect about 40–60% of their estimated collections.

Land Use Planning and the Local Budget: A Model of Their Interrelationships.

This article has two purposes. The first is to build a theoretical framework to demonstrate the link between the financial base of a local government and its land-use decisions and the practical consequence of that connection-that a jurisdictions financial and planning operations need to work in harmony. The second purpose is to use the theoretical model to explain why direct jurisdictional intervention into the land-use market is sometimes necessary. Although local governments commonly include landuse control among the many services that they provide, historically planners and finance officers have often not interacted effectively in their official roles. Planners until recent years have been traditionally interested mostly in zoning to minimize negative externalities that may attend unchanneled growth, or they have dealt with such problems as urban blight. Finance officers have been most concerned about raising or lowering tax rates, the total revenue flow to the city, and how much money the various city departments get in annual budget allocations. For example, in two International City Management Association (ICMA) books, one on financial administration and one on planning, potential overlaps are barely mentioned. Only recently have articles appeared that subtly note actual interdependencies. I In many cases, city managers and councils have been left to reconcile and solve problems created by the independent actions of these staff departments. For example, the planning department affects city revenue flows and expenditure patterns when it zones land as residential rather than commercial or industrial. Likewise, the finance department can affect the type of development that occurs when it sets exactions and fees for permits. Evidence also indicates that business taxes may influence business location. Further, a city manager might well intervene to require new developments to be either fiscally neutral or to contribute positively to the citys coffers.2

Alternative Financing Models for Transportation: A Case Study of Land Taxation in Utah

Recent events have highlighted the consequences of inadequate attention to infrastructure funding. Current funding strategies focus on fuel taxes, transfers from general funds, user fees, toll roads, congestion pricing, and using technology to enhance the fee structure of the current system. This article examines another alternative, a property tax focused on the value of land, known as land tax. A land tax would be economically efficient, in that it would not distort economic decision making. The authors review the feasibility of implementing a land tax and the revenue that could be raised from this tax. They conclude that a land tax is administratively feasible and that it could generate significant revenue to help fund much-needed infrastructure.

The role of intergovernmental aid in defining fiscal sustainability at the sub-national level

The concept of fiscal sustainability has become increasingly used over the last 20 years. However, much of the literature on fiscal sustainability at the sub-national level ignores the role of intergovernmental fiscal relations. To address this gap, this paper discusses a sufficient condition for sub-national fiscal sustainability and examines the importance of intergovernmental aid in determining that sustainability. Using panel data of counties and municipalities in the US, and using unit root and cointegration analytic techniques, this paper finds different levels of fiscal sustainability between counties and municipalities. We also find that intergovernmental aid plays an important role for fiscal sustainability for both counties and municipalities.