Geografiscal federalism

Spatial econometrics methods have been extensively applied to the analysis of decentralized fiscal policy-making in the past two decades, with most research focussing on the investigation of spatial patterns arising from various forms of competition among local authorities. This chapter first reviews the several contributions in the spatial analysis of local government data that have appeared since the publication of the first edition of the Handbook of Fiscal Federalism (2006) - over seventy fresh empirical works - with the aim of evaluating the advancements that have been made since then in the knowledge and understanding of interjurisdictional competition phenomena. The second part of the chapter discusses the impact on the empirical analysis of intergovernmental fiscal interaction of a number of recent econometric developments concerning the specification, estimation and interpretation of spatial models, and concludes with some remarks on the foreseeable developments in geografiscal federalism research.