The Fiscal Behavior of State and Local Governments presents, in one authoritative volume, Harvey Rosen's considerable contribution to the field of sub-federal public finance in the United States. He investigates how state and locality spending and taxing decisions are influenced by the economic environment in which they operate.This important book begins by examining the fiscal structures of states and localities. The analyses augment traditional models with new economic and political considerations. Rosen investigates the effect of tax structure on the growth of expenditure, the influence of the level of expenditure of neighbouring governments, and the impact of the federal income tax on the fiscal structure of state and local governments. He also employs the tools of modern dynamic analysis to shed new light on state and local behaviour in an intertemporal setting, using both panel and aggregate data. In addition, he discusses the problems involved in characterizing state tax structure. Finally, he explores a number of methodological issues relating to the theory and econometrics of tax analysis.This book will prove invaluable to economists who specialise in public finance, political economy and public policy.