Testing the Democratic Hypothesis in the Provision of Local Public Goods

Abstract

The financing of local public goods in French communities can be viewed, until 1980, as a one dimensional choice. We propose a model to formalize this choice which results in the best choice of the "median" agent in a population in Which two types of citizens have been distinguished. Those who pay and those who do not pay the "taxe professionnelle". A translog specification of the model is estimated using data about 36 communities near the city of Toulouse, France. The democratic hypothesis according to which both types of agents mentioned above have the same weight in the decision process is rejected. Moreover, we do not reject the hypothesis that this non democratic bias decreases with the size of the city.