The Flypaper Effect

Do Political Institutions Affect Danish Local Governments’ Response to Intergovernmental Grants

Datos Bibliográficos

ID7332043
AutoresMarie Kjaergaard (Aarhus University, autor de correspondencia)
Año2014
Páginas1-19
Fecha de publicación2014-11-11
Peer ReviewedSí
Open AccessNo
TipoARTICLE
RevistaLocal Government Studies (JOURNAL)
Identificadores de la revistaISSN: 0300-3930 • E-ISSN: 1743-9388
EditorialTaylor & Francis (PUBLISHER • GB)
DOI10.1080/03003930.2014.968708
OpenAlexW2065141407
IdiomaEN
Citas recibidas7
Referencias citadas27

Despite a large number of empirical studies on the flypaper effect, it remains disputed whether the effect exists and to what extent it is asymmetrical. The flypaper effect suggests that intergovernmental grants tend to result in higher increases in public expenditures than a similar increase in citizens’ private income would have led to. An asymmetrical effect exists when the fiscal response differs depending on whether grants are increased or decreased. By considering political institutions that moderate the effect of intergovernmental grants, this article offers a theoretical explanation that accounts for the mixed empirical evidence. The local response to intergovernmental grants is tested using a reform of the Danish intergovernmental grant scheme in 2007. In line with the expectation, the article finds a strong asymmetrical effect, but more surprisingly, this effect is found both when subnational budget institutions are centralised and when they are fragmented

Affect (linguistics · Danish · Economics · Political science · Politics · Public economics · Sociology · Fiscal Policies and Political Economy · Fiscal Policy and Economic Growth · Local Government Finance and Decentralization