Abstract
A partial adjustment model with endogenous speed of adjustment is developed to analyze how pressure from interest groups and mass media influence the adjustment process of local governments. A survey questionnaire to the local politicians is used to measure the pressure indicators. Based on a combined cross-section and time-series data base for Norwegian local governments, the sluggishness of the adjustment process is estimated. The dynamics of the adjustment process is shown to reflect the activity of interest groups and media pressure. Pressure groups related to primary education explain an important part of the sluggishness observed. Pressure groups promoting kindergartens and health care/care for the elderly stimulate reallocations.
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The research is funded by the Norwegian Research Council. We are grateful for comments at the 1992 Meeting of the European Public Choice Society, Torino, and at the 1992 Local Public Finance Conference at Åsgårdstrand, in particular from Robert Inman, Kåre Johansen, Wallace Oates and a referee.
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Borge, LE., Rattsø, J. & Sørensen, R. Local government service production: The politics of allocative sluggishness. Public Choice 82, 135–157 (1995). https://doi.org/10.1007/BF01047734
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DOI: https://doi.org/10.1007/BF01047734