01250pab a2200157 454500008004000000100002200040245009800062260000900160300001300169362000800182520077400190650003900964650003701003650002101040773003101061180718b2003   xxu||||| |||| 00| 0 eng d  aRevelli, Federico  aReaction or interaction? Spatial process identification in multi-tiered government structures  c2003  ap.29-53.  aJan  aThis paper models horizontal and vertical fiscal externalities in a multi-tiered structure of government, and implements maximum likelihood and instrumental variables estimation techniques to identify the source of spatial dependence in English local government expenditures. The results shows that when vertical fiscal externalities among upper-tier (County) authority and lower-tier (District) authority expenditures are explicitly taken into account, the estimated magnitude of inter-district fiscal interactions is substantially reduced. The observed positive spatial autocorrelation among District expenditures can consequently be attributed to a large extent to common reaction to County fiscal policies, rather than to actual strategic interaction. - Reproduced.  aPublic expenditure - Great Britain  aLocal government - Great Britain  aLocal government  aJournal of Urban Economics