Abstract
Although states have long practiced pay-as-you-go in financing their capital projects as a supplement to debt, academia has paid scarce attention to pay-go financing. This study fills in the niche by providing empirical evidence on what determines the use of pay-go in financing capital projects. It develops a model that considers the preferences of both voters and politicians when they make capital financing decisions in a given institutional setting. The empirical results suggest that the use of pay-go is affected by a state's income level, its economic conditions, the presence of a divided government, as well as its budgetary institutions.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 18-42 |
| Number of pages | 25 |
| Journal | Public Budgeting and Finance |
| Volume | 27 |
| Issue number | 4 |
| DOIs | |
| State | Published - Dec 2007 |
| Externally published | Yes |
ASJC Scopus subject areas
- Finance
- Economics and Econometrics
- Public Administration