Local Spending, Transfers and Costly Tax Collection
AbstractThis paper studies the effect of costly taxation on the fiscal response of local governments to intergovernmental transfers. Using a panel dataset of Peruvian municipalities, I find robust evidence that central government's grants have a greater stimulatory effect in municipalities facing higher tax collection costs. The results are consistent with costly taxation partially explaining the flypaper effect.
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Bibliographic InfoPaper provided by Department of Economics, Simon Fraser University in its series Discussion Papers with number dp12-09.
Date of creation: May 2012
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Postal: Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada
Web page: http://www.sfu.ca/economics.html
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Postal: Working Paper Coordinator, Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada
Find related papers by JEL classification:
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
This paper has been announced in the following NEP Reports:
- NEP-ACC-2012-06-05 (Accounting & Auditing)
- NEP-ALL-2012-06-05 (All new papers)
- NEP-GEO-2012-06-05 (Economic Geography)
- NEP-MAC-2012-06-05 (Macroeconomics)
- NEP-PBE-2012-06-05 (Public Economics)
- NEP-PUB-2012-06-05 (Public Finance)
- NEP-URE-2012-06-05 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Singhal, Monica, 2006.
"Special Interest Groups and the Allocation of Public Funds,"
Working Paper Series
rwp06-004, Harvard University, John F. Kennedy School of Government.
- Singhal, Monica, 2008. "Special interest groups and the allocation of public funds," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 548-564, April.
- Monica Singhal, 2006. "Special Interest Groups and the Allocation of Public Funds," NBER Working Papers 12037, National Bureau of Economic Research, Inc.
- van de Walle, Dominique & Ren Mu, 2007.
"Fungibility and the flypaper effect of project aid : micro-evidence for Vietnam,"
Policy Research Working Paper Series
4133, The World Bank.
- van de Walle, Dominique & Mu, Ren, 2007. "Fungibility and the flypaper effect of project aid: Micro-evidence for Vietnam," Journal of Development Economics, Elsevier, vol. 84(2), pages 667-685, November.
- Bev Dahlby & Ergete Ferede, 2012. "The Stimulative Effects of Intergovernmental Grants and the Marginal Cost of Public Funds," CESifo Working Paper Series 3863, CESifo Group Munich.
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