INTERCOMMUNITY SPILLOVERS AND PROVISION OF PUBLIC EDUCATION

This paper develops a conceptual framework for the systematic analysis of inter‐community spillovers and their implications for local expenditure‐investment decisions. Spillovers are distinguished on the basis of the effects they have upon the rate of exchange between current goods for private consumption and publicly provided goods. The mechanisms of spillovers—economic interaction, fiscal inter‐dependence, and migration—and the concept of community are examined in this context. A diagrammatic analysis is used to demonstrate the influence of spill‐overs on the decision making unit's allocation of resources. Methodological issues and problems involved in estimating spillover magnitudes are presented. A case study provides numerical counterparts for the theoretical quantities of the analysis. While emphasis is on publicly provided education in the United States, the framework and methodology should be applicable to other local governments and their services. Copyright © 1969, Wiley Blackwell. All rights reserved