Department

Economics, Finance and Quantitative Analysis

Document Type

Article

Publication Date

2-1991

Abstract

This paper formalizes and empirically tests the hypothesis that the deficient maintenance of public infrastructure is caused by fiscal distress. We utilize a production-decision framework in which public officials combine maintenance and new capital to produce a desired level of capital services. The behavior implied in the fiscal distress hypothesis is treated as perverse deviations from the optimal production path. The empirical findings from cross-sectional expenditures data give support to the fiscal distress hypothesis.

Journal

Review Of Economic s & Statistics

Journal ISSN

1530-9142

Volume

73

Issue

1

First Page

33

Last Page

39

Digital Object Identifier (DOI)

10.2307/2109684

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