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Pressure Groups and Public Expenditures: The Flypaper Effect Reconsidered

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  • Dougan, William R
  • Kenyon, Daphne A

Abstract

A model of government budgeting is developed in which lobbying by interest group s can divert the allocation of funds away from the one preferred by t he median voter. The model is applied to state and local governments to show that the "flypaper effect"-the tendency for lump-sum grants to increase public expenditures by more than an equivalent increase in the community's pretax income-can be explained without the customa ry assumption of voter fiscal illusion. Furthermore, the model predic ts variation in the extent of the flypaper effect among expenditure c ategories, as found in previous empirical studies. Copyright 1988 by Oxford University Press.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 26 (1988)
Issue (Month): 1 (January)
Pages: 159-70

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Handle: RePEc:oup:ecinqu:v:26:y:1988:i:1:p:159-70

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Cited by:
  1. Monica Singhal, 2006. "Special Interest Groups and the Allocation of Public Funds," NBER Working Papers 12037, National Bureau of Economic Research, Inc.
  2. Ivo Bischoff & Frédéric Blaeschke, 2013. "Incentives and Influence Activities in the Public Sector: the Trade-off in Performance Budgeting and Conditional Grants," MAGKS Papers on Economics 201320, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  3. Muhammed Islam, 1998. "Fiscal Illusion, Intergovernmental Grants and Local Spending," Regional Studies, Taylor & Francis Journals, vol. 32(1), pages 63-71.
  4. José Cruz, 2001. "An empirical application of the median voter model and of the interest group influence model to the Portuguese and Galician municipalities," ERSA conference papers ersa01p25, European Regional Science Association.
  5. Pablo Acosta, 2010. "The “flypaper effect” in presence of spatial interdependence: evidence from Argentinean municipalities," The Annals of Regional Science, Springer, vol. 44(3), pages 453-466, June.
  6. Baleiras, Rui Nuno, 2001. "To Fragment or to Consolidate Jurisdictions: the Optimal Architecture of Government," FEUNL Working Paper Series wp401, Universidade Nova de Lisboa, Faculdade de Economia.
  7. 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.
  8. Andrew Abbott & Philip Jones, 2013. "Procyclical government spending: a public choice analysis," Public Choice, Springer, vol. 154(3), pages 243-258, March.
  9. Benoît Le Maux, 2009. "Governmental behavior in representative democracy: a synthesis of the theoretical literature," Public Choice, Springer, vol. 141(3), pages 447-465, December.
  10. Burton Abrams & William Dougan, 1986. "The effects of constitutional restraints on governmental spending," Public Choice, Springer, vol. 49(2), pages 101-116, January.
  11. Paula S. Kearns, 1994. "State budget periodicity: An analysis of the determinants and the effect on state spending," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 13(2), pages 331-362.
  12. Abbott, Andrew & Jones, Philip, 2012. "Intergovernmental transfers and procyclical public spending," Economics Letters, Elsevier, vol. 115(3), pages 447-451.
  13. Ivo Bischoff & Frédéric Blaeschke, 2012. "Window-Dressing and Lobbying in Performance-Budgeting: a Model for the Public Sector," MAGKS Papers on Economics 201212, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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