U.S. City Finances and the Growth of Government, 1850–1902

John B. Legler, Richard Sylla, and John Joseph Wallis , Journal of Economic History 48(2) , 347-356 , June 1988.

In terms of revenues and expenditures, local government was the largest component of the U.S. federal system in 1902. Although it has been conjectured that this was also true during most of the nineteenth century, the evidence to support the conjecture is weak. We present a summary of a large sample of data for individual cities in 1850, 1860, and 1870, and link it to census data for 1880, 1890, and 1902. We study effects of city size and geographicalocation, and trends over time in city fiscal activity. Our provisional conclusion is that local government became the largest of the three components in the federal system only toward the end of the nineteenth century.

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