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Flypaper effect at the local governments: an empirical analysis for Aceh Province

Author

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  • Irham Iskandar

    (Development Planning Agency (Bappeda), Daerah Istimewa Aceh, Indonesia)

Abstract

The objective of this reseach is to test the phenomenon of flypaper effect in local governments in Aceh Province during 2008 to 2012. The research used panel data analysis. Technically, it regresses the independent variables of the local owned revenue and unconditional grants on dependent variable of public spending where the institutions as a moderating variable. The flypaper effect was found in the case of public and infrastructure expenditures. The study also found that the institution is capable to reduce the use of unconditional grants. It means that by the role of institution the local owned revenue can be optimized.

Suggested Citation

  • Irham Iskandar, 2015. "Flypaper effect at the local governments: an empirical analysis for Aceh Province," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 7(1), pages 24-32, April.
    • Handle: RePEc:uii:journl:v:7:y:2015:i:1:p:24-32
    DOI: http://dx.doi.org/10.20885/ejem.vol7.iss1.art3
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    References listed on IDEAS

    as
    1. Michael Chibba, 2009. "Governance and Development," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 10(2), pages 79-108, April.
    2. Bailey, Stephen J & Connolly, Stephen, 1998. "The Flypaper Effect: Identifying Areas for Further Research," Public Choice, Springer, vol. 95(3-4), pages 335-361, June.
    3. Haryo Kuncoro, 2012. "Does The Local Economic Governance In Indonesiaperform An Improvement?," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 15(1), pages 1-24, July.
    4. Robert P. Inman, 2008. "The Flypaper Effect," NBER Working Papers 14579, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Flypaper effect; institution; expenditure; public spending;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H79 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other

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