Have State and Local Fiscal Policies Become More Alike? Evidence of Beta Convergence Among Fiscal Policy Variables

Abstract

This article examines the convergence of state and local fiscal policies among the United States. Based on the standard assumptions of the neoclassical growth model with a public sector, it is shown that state and local fiscal policies have indeed converged over the past 20 years, at a rate substantially faster than real per capita gross state product. These results are contradictory to the Tiebout hypothesis.