An Information Explanation for the Flypaper Effect
We explain the plypaper effect (the tendency of a government's expenditures to increase by the amount of a grant it receives) as the result of rational calculations by voters who believe that a jurisdiction which won a grant is espatially competent. Similarly, a voter who sees that a neighboring jurisdiction got a grant which his jurisdiction dit not may reduce his estimate for the ability of the local officials, and therefore reduce his demand for local expenditures. Data on expenditures by states in the United States support the theory.
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|Date of creation:||1996|
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