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Working Paper No. 07-08

Intrametropolitan Decentralization: Overlapping Jurisdictions and Efficient Local Public Good Provision
Stephen Billings
November 2007


A new methodological approach allows for an empirical test of the benefits of decentralizing the institutions of local government. Past research has been limited by the lack of variation in government structure within a country or region and the self-selection of areas that decentralize governments. This research overcomes these limitations by 1) examining the growth of special district governments in Colorado over the last 20 years and 2) adopting a spatial difference-indifference estimator, which performs difference-in-difference estimation across space and time, to control for the self-selection of government structure. Specifically, a hedonic housing price framework estimates what impact the number of governments serving a home has on property values within the Denver-Boulder-Greeley CMSA. Results find negative impacts for forming special district governments. These impacts vary by functions decentralized and also the spatial characteristics of overlapping jurisdictions.