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Does the Flypaper Model Stick? A Test of the Relative Performance of the Flypaper and Conventional Models of Local Government Budgetary Behaviour

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  • Barnett, Richard R
  • Levaggi, Rosella
  • Smith, Peter

Abstract

Two of the most widely referred to models of local (or state) budgetary behavior are developed and tested. The models considered are a variant of the flypaper model (see, for example, Courant et al., 1979 and Oates, 1979) and a conventional model which builds on the seminal work of Wilde (1969, 1971). The models are developed in a manner which allows them to be tested empirically using data for English local government. Two types of test are employed: the ability of the two models to explain the variation in expediture levels across local governments within any given fiscal year; the ability of the models to predict future levels of expenditure given changes to local government budget constraints (as brought about, for example, by changes in grants-in-aid from central government). Copyright 1991 by Kluwer Academic Publishers

Suggested Citation

  • Barnett, Richard R & Levaggi, Rosella & Smith, Peter, 1991. "Does the Flypaper Model Stick? A Test of the Relative Performance of the Flypaper and Conventional Models of Local Government Budgetary Behaviour," Public Choice, Springer, vol. 69(1), pages 1-18, February.
    • Handle: RePEc:kap:pubcho:v:69:y:1991:i:1:p:1-18
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    Cited by:

    1. Stuart Landon, 1998. "Institutional Structure and Education Spending," Public Finance Review, , vol. 26(5), pages 411-446, September.
    2. Mark McGillivray, 2005. "What determines African bilateral aid receipts?," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(8), pages 1003-1018.
    3. R R Barnett & R Levaggi & P Smith, 1991. "Even Some Lump-Sum Grants Can Stimulate More Than others," Environment and Planning C, , vol. 9(3), pages 257-265, September.
    4. Jean Mangan & Richard Ledward, "undated". "Local Authority Grants and the Flypaper effect in England," Working Papers 005, Staffordshire University, Business School.
    5. R. K. Goel & M. A. Nelson, 2003. "Use or abuse of highway tax revenues? An economic analysis of highway spending," Applied Economics Letters, Taylor & Francis Journals, vol. 10(13), pages 813-819.
    6. Mark McGillivray, 2009. "Aid, Economic Reform, and Public Sector Fiscal Behavior in Developing Countries," Review of Development Economics, Wiley Blackwell, vol. 13(s1), pages 526-542, August.
    7. F Revelli, 1999. "Local Public Expenditure with Piecewise-Linear Nonconvex Budget Constraints," Environment and Planning C, , vol. 17(2), pages 195-209, April.
    8. Guy Gilbert, 1996. "Le fédéralisme financier, perspectives de microéconomie spatiale," Revue Économique, Programme National Persée, vol. 47(2), pages 311-363.
    9. Abdul Jalil, Ahmad Zafarullah, 2009. "Decentralization, Subnational Governments' Behaviour and Macroeconomic Instability: The Case of Malaysia," MPRA Paper 19071, University Library of Munich, Germany.

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