Abstract
Intergovernmental transfers can affect the level of local expenditures. Empirical studies indicate that lump sum grants have more stimulative effect on the level of public expenditures than local private income, which is termed “the flypaper effect.” This study examines whether grants cause the flypaper effect in the face of linear budget constraint in Turkey. Our findings confirm that the grants did cause the flypaper effect. Then it is suggested that the bureaucratic model could explain the flypaper effect. Unlike previous research, this study investigates whether the flypaper effect is uniform across local authorities. The findings indicate that population and grant increase rate influence the flypaper effect.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
