Determinants of Debt Concentration at the State Level
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2016 Public Financial Publications, Inc. We examine the general factors that affect the distribution of debt among state and local governments. We measure the distribution as the percentage of total state and aggregate local debt that is issued or held by the state level of government. Using a fiscal federalism framework, we discuss the fiscal, legal, and political factors that play an important role in determining the level of government that issues debt. Findings suggest that important factors of debt concentration at the state level include state political ideology and economic factors of income per capita and unemployment rates.