William Duncombe

An analysis of returns to scale in public production, with an application to fire protection

Abstract This paper analyzes returns to scale in public production. Existing studies fail to differentiate among three dimensions of scale: service quality, the level of governmental activity, and the number of people served. A fourth dimension, economies of scope, is need for agencies that provide multiple services. This paper provides a formal definition of returns to scale for each dimension. This framework is applied to fire protection, using a translog cost function with two services, fire prevention and fire suppression. The results indicate economies of scope, increasing returns to quality scale, and constant returns to population scale.

State and Local Debt Burdens in the 1980s: A Study in Contrast

State and local governments have coped with major changes in their fiscal environment during the 1980s. The impact of tax and expenditure limitations (Joyce and Mullins, 1991), declining federal aid (Nathan and Lago, 1988), and changes in federal tax policy (Courant and Rubinfeld, 1987) all changed the calculus facing state and local fiscal decision makers. While the effects on their tax and expenditure structures have been studied, the impact on state and local government debt policy and management has received scant attention.

Demand for Local Public Services Revisited: the Case of Fire Protection

This article estimates a more general demand function for local fire services simultaneously with a flexible cost function. Besides the standard income and price variables, the demand model includes estimates of marginal cost, tax exporting, and debt financing. Using these results, it is possible to reject several of the common assumptions about public sector technology and costs made in past demand re search. When the estimates of the demand model proposed in this study are compared to a standard expenditure demand model, there are major differences. In particular, the elasticity with respect to median income was found to be significantly higher using the more general model, which suggests that misspecification of the demand function may partially account for previous findings of a flypaper effect.

Public Expenditure Research: What have we Learned?

This article will examine progress made in the field of public expenditure theory in the quarter century since Burkhead and Miner (1971). First, normative expenditure theory will be examined along with its influence on analytic techniques, such as cost-benefit analysis. The second area of analysis will be empirical research on public expenditure decisions. Finally, areas for future research will be identified.

Economic Change and Fiscal Planning: The Origins of the Fiscal Crisis in New York State

What can policy makers learn from the fiscal experience of New York during the 1980s? By most measures, the state wentfrom a position offiscal strength in the early 1980s to fiscal crisis by the end of the decade. In their analysis of demographic, social, economic, andfiscalpatterns, Roy Bahl and William Duncombe show that the lack of long-term fiscal planning and short-term discipline were the root causes of the turnabout. They callfor greater use of both, as well as tax reforms that will better reflect the changing reality of local and state economies. Total income in New York State in 1990 was

Building State and Local Government Analytic Capacity: Using Regional Economic Models for Analysis of Public Policy:

395.3 billion, almost the same size as that of Canada. Based on its per capita income, New York would rank as one the richest nations in the world. The state is home to some of the largest corporations and leading universities; it is blessed with good seaports and has developed a strong transportation infrastructure; its politicians are and always have been national leaders, and New Yorks rich melting-pot history has made the economy a center of economic development energy. Metropolitan New York City is one of the worlds largest urban agglomerations and the most important financial center.

The Impact of Courts on the Decision to Expand Jail Capacity

Fall 1998 165 BUILDING A LONG-TERM and sustainable economic future is a key objective of many state and local government policies, particularly those focusing on economic development and infrastructure. Traditionally, efforts to evaluate the economic impact of such policies have been based on simple heuristic methods. Recent developments in regional economics and advances in computer technology have made more powerful analytical tools available to public managers. However, the use of sophisticated regional economic models does not come without a price—namely, higher costs for their purchase, data maintenance, and training of staff to operate and interpret their results. Continued decentralization of governmental functions (such as environmental infrastructure and social services) to the state and local level and the emergence of aggressive policies to promote economic development imply the need for improved policy analysis capacity. This need has triggered the popularity of computerized and sophisticated models of regional economies. Regional models have become major working tools of the planning profession and are used by state and local governments all over the country in a wide range of policy areas (Sivitanidou and Building State and Local Government Analytic Capacity: Using Regional Economic Models for Analysis of Public Policy

Retire to where? A discrete choice model of residential location

Over the past 20 years, an extensive literature has focused on the role of courts in shaping public policy and management. Yet despite the continuing interest in the topic, very little hard evidence exists on the actual impact of court interventions in public agencies. The objective of this study is to estimate the impact of court orders and mandates on public programs in one of the most important areas of judicial intervention, local jails. The authors findings for a national sample of jails in 1983 and 1988 confirm that court orders do influence the decision to expand the capacity of local jails. However, other jail-related factors—the level of overcrowding and jail age-actually have stronger impacts on the probability that a jurisdiction will decide to expand capacity than does the presence of a court order. These results imply a reconsideration of the conventional wisdom that court orders force reluctant elected officials to vote for unpopular capital projects, such as jails. The authors findings indicate that many jurisdictions, given adequate fiscal resources, are likely to plan for capital expansion when they need it—not when forced by the courts to act.