Politics vs economics: Evidence from municipal annexation

This paper investigates economic and political factors in suburban annexation decision in large U.S. cities. This paper employs a median-voter model, which suggests a natural latent-variable estimation strategy. Bivariate legit and normal procedures incorporating information about state laws governing annexation are run on census tract level data. Estimated parameters are used to evaluate the effects of economic and political variables. Results show cities' desire to expropriate suburban tax base did not motivate annexation, although cities were sensitive to other economic factors. The desire to offset political and racial effects of urban migration had a consistent and positive effect on annexation. (C) 1999 Academic Press.