Predictive models of government spending behavior based solely on the median voter theory have demonstrated limited utility, particularly when intergovernmental grants are involved. Since the 1970s, research on the impact of intergovernmental grants and aids on recipient governments has demonstrated that spending increases greater than predicted by the median voter theory, a.k.a. the “flypaper effect.” One of the challenges facing those trying to empirically test for the flypaper effect is the limited availability of unconditional grants. This study attempts to fill that void in the literature by testing the relationship between spending in 581 Wisconsin cities and villages and state aid receipts through its Shared Revenue program. The findings are generally consistent with previous studies of the flypaper effect, meaning that recipient governments spend more than would be predicted by the median voter theory. As such, the authors suggest that pure economic theories of government spending are limited and that political and institutional factors need to be given greater consideration.
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1 March 2007
Research Article|
March 01 2007
Wisconsin local government, state shared revenues and the illusive flypaper effect
Steven Deller;
Steven Deller
University of Wisconsin-Madison
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Publisher: Emerald Publishing
Online ISSN: 1945-1814
Print ISSN: 1096-3367
Copyright © 2007 by PrAcademics Press
2007
licensed reuse rights only
Journal of Public Budgeting, Accounting & Financial Management (2007) 19 (2): 200–220.
Citation
Deller S, Maher C, Lledo V (2007), "Wisconsin local government, state shared revenues and the illusive flypaper effect". Journal of Public Budgeting, Accounting & Financial Management, Vol. 19 No. 2 pp. 200–220, doi: https://doi.org/10.1108/JPBAFM-19-02-2007-B004
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