Abstract ：
We analyze whether population affects spending on local public goods through economies of scale. The analysis examines two contiguous regions and two types of public goods: those that regional government ”delivers” to residents (e.g., fire protection) and those that residents must travel to access (e.g., public libraries). In the former case, government’s per capita local public expenditures might increase with regional population. In the latter case, they decline with population through scale economies. With carriage costs considered, however, the total cost of local public goods does not decline through economies of scale.

Keywords : spatial distance; carriage costs; regional population; local public expenditure

JEL code: R51, H72, H76, R53