Urban Sprawl and the Cost of Public Services: An Evaluation of Spanish Local Governments

Abstract

This paper evaluates the impact of urban sprawl on municipal expenditures, considering all the 3,179 Spanish municipalities with more than 1,000 inhabitants in 2005. We have ascertained that there is an influence of urban sprawl on per capita spending: the higher the population density, the lower the total investment and current expenditures per capita. This result supports the claims in favour of smart growth in municipalities. Furthermore, the economic level exerts a positive influence on expenditures per capita. Concerning social factors, our data show that population yields economies of scale to a limit (the function presents a U-shape): from the point of the minimum per-capita spending, if the population keeps on growing, per-capita spending rises.
 
 KEYWORDS: • urban sprawl • municipal spending • public services • smart growth • Spain

On the Determinants of Local Government Debt: Does One Size Fit All?

“…Specifically, they evaluate the impact of urban sprawl on municipal expenditures, finding that the higher the population density, the lower the total expenditures and current expenditures per capita which, in principle, would lead to lower levels of debt (negative relationship). This finding, in the opinion of Benito et al (2010), would favor those voices asking for "smarter" growth in municipalities.…”

“…For instance, according to HortasRico and Solé-Ollé (2010), the urban spatial structure of many Spanish cities, measured as urbanized land per person, not only has an environmental impact, but also a major impact on municipal finances. Benito et al (2010) also consider similar issues. Specifically, they evaluate the impact of urban sprawl on municipal expenditures, finding that the higher the population density, the lower the total expenditures and current expenditures per capita which, in principle, would lead to lower levels of debt (negative relationship).…”

“…For instance, Benito et al (2010) find that the impact of population on municipal expenditures is not linear. Specifically, they find that population yields economies of scale up to a limit, since the functions present a U-shape, as from the point of the minimum per capita spending, if the population keeps on growing, per capita spending rises.…”

An urban sprawl index based on multivariate and Bayesian factor analysis with application at the municipality level in Valencia

“…The sprawled city has economic costs with a significant impact on public local finance because of the public services assumed by municipalities, as demonstrated in many studies in the United States (RERC, 1974;Speir, 2002;Burchell et al, 2003;Carruthers and Ulfarsson, 2003). In Spain, some authors have also addressed this issue (Garbiñe, 2007;Solé-Ollé and Hortas-Rico, 2008;Hortas-Rico, 2010;Benito et al, 2010). In any case, all of them provide very different results, depending on which expenditure is considered and where it has been studied.…”

City Size, Population Concentration and Productivity: Evidence from China

“…On the one hand, the higher concentration of individuals and firms leads to a higher possibility of frequent faceto-face communication, which is likely to provide better opportunities for knowledge spillover and innovation generation (Partridge et al, 2009). On the other hand, several scholars have pointed out that denser cities can efficiently provide infrastructure and other public services using less per unit cost in comparison to sprawl cities (Knaap et al, 2001;Benito et al, 2010). From the perspective of mismatching resources, Wheeler (2001) proved that dense settings may enhance labor productivity via lower search costs.…”