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Central transfers and incentives to collect local revenue among the Central Region of Ghana’s local government officials

Analysing the flypaper effect

Bibliographic Data

ID22236202
AuthorsChristopher Dick-Sagoe (0000-0001-5295-252X, University of South Africa), Ernest Ngeh Tingum (0000-0002-2309-9694, University of Namibia), Peter Asare-Nuamah (0000-0002-3122-909X, University of Bonn), Denis Nfor Yuni (0000-0002-7468-4105, University of Namibia), Nicholas Baidoo (0000-0001-7017-2287, Queen Mary University of London, corresponding author)
Year2025
Volume12
Issue1
Publication date2025-07-12
Open AccessYes
TypeARTICLE
VenueHumanities and Social Sciences Communications (JOURNAL)
Journal identifiersISSN: 2662-9992 • E-ISSN: 2662-9992
PublisherSpringer Science and Business Media LLC (PUBLISHER)
DOI10.1057/s41599-025-05463-x
OpenAlexW4412361969
LanguageEN
Citations received1
References cited44

Local governments that rely heavily on central transfers are likely to face a laxity problem when increasing locally generated revenues. The flypaper effect identifies this overdependence by examining the relationship between local expenditures and revenues (central transfers and locally generated). Local governments in Ghana depend on central transfers and locally generated revenues to finance local development. Central transfers are important because they balance fiscal capacities across local governments and promote equalisation in the provision of public goods. The study used panel data estimation to analyse revenue, expenditure, distance, and population from 2009 to 2020 for 17 Ghanaian local governments in the Central Region. The results show the presence of the flypaper effect, a situation explained by the fiscal interest model to reduce the effectiveness and efficiency of local government officials as they tend to be less responsive to the needs of the local people they serve. Furthermore, the presence of flypaper effects reduces local governments’ incentives to increase the mobilisation of local revenue. This paper recommends policies that strengthen local government financial autonomy and, consequently, economic development

Business · Central government · County government · Economics · Incentive · Local government · Microeconomics · Political science · Public economics · Revenue · Fiscal Policy and Economic Growth · Local Government Finance and Decentralization · Public Administration · Taxation and Compliance Studies · Finance

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Citations per year1
Citation span2026 - 2026 (1)
Highly citedNo

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