The effects of change in grants-in-aid regime and cuts on grants on municipalities' expenditures in Finland
In this paper the role of grants-in-aid in the Finnish municipal sector will be studied. Bearing in mind that there are important dynamic interrelationships between the taxing, spending decisions and grants-in-aid policy, an econometric analysis of the municipalities' expenditures using panel data will be carried out. Firstly, a comparison of two grants-in-aid systems, one based on matching grants and the other on general grants will be made. Secondly, an analysis of the effects of cuts on the municipalities' grants will be done.
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- P.J. Grossman, 1988. "The Impact of Federal and State Grants on Local Government Spending: A test of the fiscal illusion hypothesis," Economics Discussion / Working Papers 88-07, The University of Western Australia, Department of Economics.
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