Public input competition

• 成果类型: Article
• 署名作者: Bucovetsky, S
• 署名单位: York University - Canada
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2004.07.001
• 发表日期: 2005
• 页码: 1763-1787
• 关键词: Fiscal competition; infrastructure; factor mobility; increasing returns

摘要

Public investment in infrastructure may help create agglomeration economics, by attracting mobile factors such as skilled labour. Competition among regions in public investment can then be destructive. This paper analyzes the Nash equilibria to a simple model of public input competition. Even though the regions are assumed identical, the equilibrium may not be symmetric. The problem with non-cooperative behaviour is not (only) that regions invest too much, but that too many regions may choose to invest. Depending on the parameter values, the Nash equilibrium may be efficient, may be inefficient or may not exist (at least not in pure strategies). Better mobility among regions leads to more aggressive competition. The analysis suggests that rents from public investment may be dissipated by governments' competition to attract mobile factors. (c) 2004 Elsevier B.V. All rights reserved.