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The dual illusion of grants-in-aid on central and local expenditures: A reply

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  • Robert Logan
  • Yeung-Nan Shieh

Abstract

In this Journal, Chu [Chu, H. Y. (2003). Public Choice, 114: 349–359] offered corrections for “inconsistencies” in the Logan model of dual fiscal illusion.] Logan, R. R. (1986). Journal of Political Economy,94: 1304–1318]. This paper shows that Logan (1986) introduced two prevailing models of fiscal illusion and chose to follow one of them for generalization. Chu has not corrected any “inconsistencies”. He has instead offered a generalization of the other type of illusion. This paper demonstrates that the Chu generalization suffers from multiple irrational and unachievable results, which is why Logan (1986) chose the original version in the first place. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Robert Logan & Yeung-Nan Shieh, 2005. "The dual illusion of grants-in-aid on central and local expenditures: A reply," Public Choice, Springer, vol. 124(3), pages 383-390, September.
    • Handle: RePEc:kap:pubcho:v:124:y:2005:i:3:p:383-390
    DOI: 10.1007/s11127-005-2054-2
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    References listed on IDEAS

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    1. Wallace E. Oates & Wallace E. Oates, 2004. "An Essay on Fiscal Federalism," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 22, pages 384-414, Edward Elgar Publishing.
    2. Winer, Stanley L, 1983. "Some Evidence on the Effect of the Separation of Spending and Taxing Decisions," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 126-140, February.
    3. Robert Logan & J. O'Brien, 1989. "Fiscal illusion, budget maximizers, and dynamic equilibrium," Public Choice, Springer, vol. 63(3), pages 221-235, December.
    4. Chu, Hong-Yih, 2003. "The Dual-Illusion of Grants-in-Aid on Central and Local Expenditures," Public Choice, Springer, vol. 114(3-4), pages 349-359, March.
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