The impact of state intervention and bankruptcy authorization laws on local government deficits

Autor:	Lang (Kate) Yang
Rok vydání:	2019
Předmět:	Restructuring Moral hazard media_common.quotation_subject 05 social sciences 0506 political science Intervention (law) Bankruptcy Law Debt 0502 economics and business 050602 political science & public administration Revenue Expense ratio Business 050207 economics Business and International Management General Economics Econometrics and Finance Public finance media_common
Zdroj:	Economics of Governance. 20:305-328
ISSN:	1435-8131 1435-6104
DOI:	10.1007/s10101-019-00222-6
Popis:	Local governments in the United States can file for bankruptcy to restructure their debt if allowed by state laws. While some states legislate an unconditional authorization, others conditionally permit local filings, do not give authorization, or intervene in local crises. This paper investigates the impact of state policy adoption on local governments’ revenue to expense ratio, a measure of deficit. While bankruptcy authorizations do not show an impact at the mean, a median locality decreases the revenue–expense ratio after the state adopts an authorization unconditional on state intervention, suggesting a moral hazard effect. Localities with conditionally high deficits, however, increase the ratio upon the adoption of a conditional authorization, possibly because they want to avoid being subjective to conditions placed by states.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::7912de93e82a5ccb49912de83fdd257d https://doi.org/10.1007/s10101-019-00222-6 Zobrazit plný text záznamu Plný text ve formátu PDF Plný text ve formátu HTML
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