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

  • Deller, Steven C.
  • Walzer, Norman

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

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

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Handle: RePEc:ags:joaaec:15283
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  1. Philip J. Grossman, 1989. "Intergovernmental grants and grantor government own-purpose expenditures," Monash Economics Working Papers archive-12, Monash University, Department of Economics.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. Zvi Griliches & Jerry A. Hausman, 1984. "Errors in Variables in Panel Data," NBER Technical Working Papers 0037, National Bureau of Economic Research, Inc.
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