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Structural Shifts In The Treatment Of Intergovernmental Aid: The Case Of Rural Roads

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  • Deller, Steven C.
  • Walzer, Norman

Abstract

The effects of structural shifts in the treatment of intergovernmental aid during the 1980s are tested using a sample of 1,929 rural counties with local road responsibilities. A dynamic model is used to test the hypothesis that local public officials treated intergovernmental aid differently after the Reagan/Bush policy of Fiscal Federalism was implemented. Empirical findings from the dynamic model are that federal aid was much more simulative at the end of the decade than in earlier years but the effects of state aid remained the same throughout the 1980s. These differences are attributed to a perception that federal aid is less certain and more transitory than permanent.

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Bibliographic Info

Article provided by Southern Agricultural Economics Association in its journal Journal of Agricultural and Applied Economics.

Volume (Year): 27 (1995)
Issue (Month): 02 (December)
Pages:

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Handle: RePEc:ags:joaaec:15283

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Web page: http://www.saea.org/jaae/jaae.htm
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Related research

Keywords: Intergovernmental aid; Simulative and substitutive effects; Transitory and permanent effects; Rural roads; Public Economics;

References

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  1. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
  2. Philip J. Grossman, 1990. "The Impact of Federal and State Grants on Local Government Spending: a Test of the Fiscal Illusion Hypothesis," Public Finance Review, , vol. 18(3), pages 313-327, July.
  3. Baumel, C. Phillip & Shornhorst, Eldo, 1983. "Local Rural Roads and Bridges: Current and Future Problems and Alternatives," Staff General Research Papers 11669, Iowa State University, Department of Economics.
  4. Deller, Steven C & Chicoine, David L & Walzer, Norman, 1988. "Economies of Size and Scope in Rural Low-Volume Roads," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 459-65, August.
  5. Philip J. Grossman, 1989. "Intergovernmental grants and grantor government own-purpose expenditures," Development Research Unit Working Paper Series archive-12, Monash University, Department of Economics.
  6. O'Brien, J. Patrick & Shieh, Yeung-Nan, 1990. "Utility Functions and Fiscal Illusion from Grants," National Tax Journal, National Tax Association, vol. 43(2), pages 201-05, June.
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Cited by:
  1. Laura Sour, 2013. "The flypaper effect in Mexican local government," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 28(1), pages 165-186.
  2. Juan González Alegre, 2012. "An evaluation of EU regional policy. Do structural actions crowd out public spending?," Public Choice, Springer, vol. 151(1), pages 1-21, April.
  3. Swenson, David & Deller, Steven C., 2001. "Devolution or Convolution? The Changing Relationship Between Federal, State and Local Governments," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 31(1).
  4. Deller, Steven & Maher, Craig & Lledo, Victor, 2002. "Wisconsin Local Government, State Shared Revenues and the Illusive Flypaper Effect," Staff Paper Series 451, University of Wisconsin, Agricultural and Applied Economics.
  5. Steven C. Deller & Craig S. Maher, 2006. "A Model of Asymmetries in the Flypaper Effect," Publius: The Journal of Federalism, Oxford University Press, vol. 36(2), pages 213-229.

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