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P A R T V Urban Public Economics The central issues in public economics – the form of government, the method of taxation, and decision-making on public projects – have been at the center of public debate at least since the dawn of history | A Companion to Urban Economics Edited by Richard J. Arnott Daniel P. McMillen Copyright 2006 by Blackwell Publishing Ltd I PART Urban Public Economics A Companion to Urban Economics Edited by Richard J. Arnott Daniel P. McMillen Copyright 2006 by Blackwell Publishing Ltd Urban Public Economics The central issues in public economics - the form of government the method of taxation and decision-making on public projects - have been at the center of public debate at least since the dawn of history the earliest forms of taxes were labor duties and payment of crops . It should therefore come as no surprise that public economics has a long and distinguished intellectual history. Modern urban public economics however did not emerge as a well-defined field until the early 1970s and even now remains somewhat amorphous. Because local government institutions differ so strongly between countries the field is even more American than the rest of urban economics though the issues it has taken up will receive increasing attention in other countries. To understand the scope of urban public economics it is therefore necessary to understand the broad characteristics of local government in the United States. Like many other countries the USA has three principal levels of government -central or federal state and local. In many countries authority essentially rests with the central government which it delegates to the state governments which in turn delegate it to local governments. In other countries with a federalist system the central and state governments operate on a more equal footing each having its own set of taxes and expenditure responsibilities as defined in the constitution. But local governments in most of these countries are subservient to state governments. In the USA in contrast there is essentially a double layer of federalism with the federal constitution describing the balance of powers between the federal and state governments and state constitutions describing the .
