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This study empirically examines the stimulatory effect of federal transfers in India using a panel dataset of 21 states for the period 2005–06 to 2019–20. In mapping the stimulus effect, we test the validity of the 'extended flypaper effect', where lumpsum federal transfers tend to increase the state's public spending more than a corresponding increase in its own revenue and borrowing resources. The results suggest that the marginal effects of state own-source revenues and borrowing on India's sub-national non-capital expenditure outweigh those of federal transfers. Therefore, the existence of flypaper effects at the sub-national level in India cannot be ruled out. However, at the disaggregate level, 10 of 21 states report a stimulatory effect of lumpsum federal transfers on state spending. Of these, nine states are mapped to the capital expenditure account and one state to the revenue account. The empirical results also reveal the presence of fiscal illusion i.e., the systematic misperception of fiscal parameters. While the fiscal illusion produced by federal transfers is not a concern, the debt-driven fiscal illusion is worrisome in India as most states' non-development revenue expenditure is fuelled by borrowed money. Hence corrective action is needed to find a strategy of optimal mix of three stimulus factors for these states namely states' own revenue, federal transfers and state borrowing. [ABSTRACT FROM AUTHOR]

This paper aims to analyze the influence of local revenues, unconditional grants, and total population on regional expenditure in six provinces in Sulawesi, Indonesia. Panel data covering the period from 2013 to 2023 were analyzed using the fixed effects model (FEM) using the STATA software. The results show that local revenue has a significant positive effect on regional expenditure (β = 0.366; p-value 0.000 < 0.05), unconditional grant has a significant positive effect on regional expenditure (β = 0.501; p-value 0.000 < 0.05), and total population has a significant positive effect on regional expenditure (β = 1.207; p-value 0.001 < 0.05). The results show considerable regional disparities, with Southeast Sulawesi and North Sulawesi displaying the highest dependency on central funds, while South Sulawesi exhibits relatively greater fiscal independence. These findings highlight the need for policy reforms to strengthen local revenue generation, minimize reliance on central government transfers, and prioritize investments in infrastructure. Such strategies are crucial for ensuring fiscal sustainability, enhanced local autonomy, and long-term regional growth.

The granting of authority based on regional autonomy should be able to create local government independence to manage their own finances through local own-source revenue and promote sustainable economic growth. However, many previous studies have found the flypaper effect phenomenon in Indonesia. This research aims to determine the effect of local own-source revenue, intergovernmental transfers, and local government financing on local government expenditure and detect the flypaper effect phenomenon in Indonesia. This quantitative method with a purposive sampling technique has been used to obtain data from 467 regencies/cities in Indonesia for the fiscal year 2021. Hypothesis testing in this research employs multiple linear regression analysis. The research result shows local own-source revenue, general allocation fund, special allocation fund, and revenue sharing fund do not affect local government expenditure, and local government financing positively affects local government expenditure. This research did not find the flypaper effect in local governments in Indonesia but identified other funding mechanisms to meet the needs of local government expenditure derived from local government financing. [ABSTRACT FROM AUTHOR]

The article explores the growing trend of fiscal recentralization in Polish local finance, evident in the increase of intergovernmental transfers, leading to expanded budgetary expenditures, known as the "Flypaper Effect" (FPE). It aims to identify the causes and extent of the FPE in Polish municipalities and cities with county rights from 2010 to 2020, using descriptive and panel data analyses. Empirical research confirms the presence of the FPE in Polish local governments, more pronounced in rural municipalities than in urban counterparts and cities with county rights. The rise in public budgetary expenditures results from limited fiscal autonomy and the ongoing process of recentralization in public finance, further amplifying the FPE. The strength of the FPE varies depending on the specific types and characteristics of intergovernmental transfers. Additionally, the article highlights significant flaws in Poland's local funding legislation and its consequences, proposing potential paths for local finance reforms. In conclusion, it underscores the increasing trend of fiscal recentralization in Polish local finance driven by the FPE and emphasizes the pressing need for reforms to address these challenges. [ABSTRACT FROM AUTHOR]

AbstractConcerns about opportunistic behaviors by governments and their failure to recognize local needs are significant issues with place-based policies. In China’s aid program targeted at Xinjiang, rather than solely relying on fiscal transfers and centralized decision-making, there was encouragement for the involvement of state-owned enterprises and direct cooperation between aid providers and recipients. While these arrangements have helped the program succeed in addressing concerns related to place-based policies and have contributed to economic growth in recipient areas, there are potential negative impacts on the local environment, leading to what is termed as a pollution heaven scenario. Analyzing of data from 72 ethnic cities in China using a difference-in-differences approach, we demonstrate that the program resulted in notable increases in local GDP and PM2.5 concentrations, accompanied by expansion of polluting industries. This study is pertinent to ongoing discussions in place-based policy research and offers policy insights both domestically and internationally. [ABSTRACT FROM AUTHOR]

This study empirically examines the asymmetric effect of federal transfers in India using a panel dataset of 18 states from 2000–2001 to 2019–2020. In mapping the asymmetric effect of federal transfers on subnational spending across the Indian states, we test it in the extended 'flypaper effect' framework, examining whether subnational expenditures respond in the same way to changes in federal transfers. To quantify the extent of the asymmetric effect on the subnational expenditure, we employed the panel non‐linear ARDL model. The results suggest that subnational spending has a greater asymmetric response to the increase in federal transfers than to a decrease. At the disaggregate level, ten out of 18 states have a fiscal replacement kind of asymmetric effect in any spending specifications. But only three validate it in the capital and development spending, and seven states validating in the non‐development expenditure on the revenue accounts. Replacing the cut in federal transfers with other revenue sources that prioritise non‐development spending over development spending is problematic. [ABSTRACT FROM AUTHOR]

Background: Flypaper Effect is a phenomenon of regional financial dependence caused by the large contribution of equalization funds provided by the Central Government compared to the contribution of PAD to Regional Expenditure. North Maluku is a province with stable and highest economic growth during and after the Covid-19 outbreak. Purpose: This study aims to analyze the occurrence / absence of the Flypaper Effect phenomenon in districts / cities in North Maluku Province and its effect on regional economic growth. Methods: This type of research is descriptive quantitative, with variables including PE, PAD, DAU, DAK and BD. The data used is sourced from BPS and DGT with a data year period of 2014-2021. The data analysis technique is panel data regression with path analysis method. Results: The results of this study show that districts / cities in North Maluku Province do not experience the phenomenon of Flypaper Effect, and Economic Growth in North Maluku Province is fully influenced by Regional Original Income and Regional Expenditure, while DAU and DAK do not directly affect Economic Growth, but affect indirectly through the mediation of Regional Spending. Conclusion: In the districts / cities of North Maluku Province there is no Flypaper Effect phenomenon and does not affect economic growth, directly the economic growth of districts / cities in North Maluku Province is influenced by PAD and BD, while indirectly influenced by DAU and DAK. [ABSTRACT FROM AUTHOR]

This study empirically examines the influence of intergovernmental transfers and the fall of it to local government’s expenditure in Indonesia as well as the possibility of flypaper effect occurrence over pandemic. Over the years, in general, intergovernmental transfers in Indonesia was increasing since decentralization was applied in 2000 till the pandemic hit the country which made the regulator for the first time in 20 years decided to cut overall transfers for municipalities in order to recover economically. A set of cross-section data used in this study is the year 2020 from 34 provinces, 417 regencies, dan 91 cities. The result of pooled OLS regression model shows that flypaper effect does appear for all types of expenditures, such as total expenditure, capital expenditure, and operational expenditure of the local government. Asymmetric response of those three are quite varied. Total expenditure shows asymmetry whereas capital and operational expenditures find the opposite.

The flypaper effect is undoubtedly among the most interesting concepts in subnational government spending behavior. This study is the first attempt to provide empirical evidence on the existence of the flypaper effect in the two largest economies in Sub-Saharan Africa: Nigeria and South Africa. Using the two-step system generalized method of moment’s estimator, our results show that the flypaper effect exists for both state and provincial governments in Nigeria and South Africa. Provincial governments in South Africa are found to be more responsive to positive changes in unconditional federal transfers than state governments in Nigeria. We therefore recommend sen­sitization on the receipt and disbursement of unconditional federal transfers. This will help reduce the illusion or information asymmetry about the use of unconditional federal transfers.

This study aims to confirm the flypaper effect phenomenon and the impact of the Covid-19 pandemic on local own-source revenue (LOR), general allocation fund (GAF), and local government financing on local government expenditure in Indonesia. The research used a quantitative method, while the sample was data on regional government budget (RGB) realization in 335 local governments in 2019 – 2020. The data were analyzed using Moderating Regression Analysis. The study found that there was a flypaper effect phenomenon that encouraged the local governments to use GAF, instead of LOR for their local expenditure. The GAF and local government expenditures were higher during the Covid-19 period. To overcome the flypaper effect phenomenon, the central government is advised to improve the GAF policy by setting priorities for its use. Local governments must encourage micro, small, and medium enterprises to help support LOR. This study proves there exists the phenomenon of the flypaper effect in developing countries that implement the presidential system (republic) and provide substantial empirical evidence on government spending policies during crisis and non-crisis (Covid-19).

Copyright of Revista Contabilidade, Gestao E Governanca is the property of Revista Contabilidade, Gestao E Governanca and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

There is an ongoing debate about the determinants of municipal financial performance around the world, including Central America. This article fills a research gap using data from the 298 Honduran municipalities for 2002–2015. Partisanship theories are found to be the strongest explanatory factor, for leftist governments show greater total municipal spending. Political alignment also has a weak, positive impact on investment spending. The electoral legislation is working properly in Honduran municipalities, since the data reject an opportunistic political budget cycle. Furthermore, Honduran municipalities show diseconomies of scale, for higher population density means greater per capita expenditures. The economic level impacts positively on expenditure per capita, which confirms Wagner's Law. Regarding transfers, we find a strong flypaper effect. As a point for practitioners, the granting government should monitor that this extra spending is the one intended with the transfers. [ABSTRACT FROM AUTHOR]

This study investigates the spatial heterogeneity of the flypaper effect in a sample of 2,451 Spanish municipalities over the period 2003–2015 by means of Bayesian spatial panel data econometric techniques including municipal and time-period fixed effects. In particular, we analyse how differences in the degree of political competition and the local governments' monitoring and enforcement effort in tax collection affect the size of the flypaper effect. Our results suggest that municipalities with higher tax collection efficiency and where local governments have more political strength exhibit a lower flypaper effect. [ABSTRACT FROM AUTHOR]

The main objective of this study is to examine whether the local self-governments (LSG) in Serbia spend their budget as predicted by the flypaper effect (FPE). The presence of the FPE was estimated using the panel regression applied to the population of 166 Serbian LSGs for the period 2011-2019. Similar to findings in other country-specific empirical studies, the results of regression analysis robustly confirmed the presence of the FPE. The occurrence of the FPE is dependent on the level of LSGs' development and changes in fiscal policy associated with the recent fiscal consolidation. The results obtained indicate that the allocation policy of unconditional transfers in Serbia is rule-based and allegedly free from political factors. The hypothesis that was examined tried to find out whether the overall presence of the FPE is driven by the fiscal illusion deriving from the institutional context of the Serbian LSG public finance despite transparent system of transfers allocation. To the best our knowledge, this is the first empirical study that examined the FPE in Serbia. [ABSTRACT FROM AUTHOR]

Untuk meningkatkan kekuatan pajak pemerintah daerah, pemerintah pusat menerapkan reformasi besar-besaran pada tahun 2010 dengan mengalihkan Pajak Bumi dan Bangunan Perkotaan (PBB-P2) ke pemerintah daerah. Meskipun pajak menyumbang sebagian besar pendapatan pemerintah daerah, perilaku belanja pemerintah daerah dipertanyakan, dan tidak jelas apakah belanja publik telah ditingkatkan. Studi ini mengkaji pengaruh penguatan kebijakan PBB-P2 terhadap peningkatan pendapatan asli daerah (PAD) dan dampaknya terhadap pola belanja daerah, khususnya apakah masih ada flypaper setelah reformasi kebijakan. Menerapkan metode data panel efek tetap untuk pemerintah daerah Indonesia dari tahun 2005 hingga 2020, kami menemukan bahwa penguatan kebijakan PBB-P2 memiliki dampak positif yang signifikan terhadap PAD. Efek positif ditemukan signifikan satu tahun (tahun +1) setelah implementasi kebijakan di setiap daerah, termasuk untuk provinsi, kabupaten, dan kota, dengan diterbitkannya peraturan daerah terkait PBB-P2. Menariknya, peningkatan PAD yang signifikan berdampak pada pola belanja daerah. Dengan demikian, fenomena flypaper effect tidak terjadi dari tahun 2005 hingga 2020. Hal ini berimplikasi bahwa pemerintah pusat dapat secara selektif memberdayakan pemerintah daerah untuk memungut pajak daerah dan retribusi yang sesuai. Hal itu dapat dilakukan dengan menyediakan sumber pajak daerah yang baru, melakukan restrukturisasi jenis pajak, penyederhanaan jenis retribusi penggunaan, dan harmonisasi peraturan pemerintah daerah dengan pemerintah pusat.

Fiscal system incentivises local government officials to depend on central government's transfers to fund their budgets. This paper examines whether district and municipal status local government officials exhibit the same spending behaviour when presented with central government's transfers. The paper uses the panel data model to estimate the flypaper effect on district and municipal status local governments in the Central Region of Ghana from 2008 to 2015. The result shows differences in spending behaviour between district and municipal status local governments, where the flypaper effect is more pronounced on municipal status local governments (52.6%) than district status local governments (44.8%). Though municipal local governments are financially better in raising own-source revenues compared to the district local governments, the design of the fiscal system tends to make municipal local governments more reliant on central transfers than on expenditure of own-source revenues. This reduces interest in raising own-source revenue and its expenditure, a situation which has an adverse long-term impact on decentralisation in terms of citizen empowerment and participation. The study recommends an optimal level of central transfers which will serve the purpose of correcting vertical and horizontal imbalances, as in theory, and at the same time promote the ideals of decentralisation (citizen empowerment and participation). [ABSTRACT FROM AUTHOR]

Copyright of Journal Public Administration & Social Management / Administração Pública e Gestão Social is the property of Administracao Publica e Gestao Social and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Journal of Administrative Sciences / Yonetim Bilimleri Dergisi is the property of Canakkale Onsekiz Mart Universitesi, Terzioglu Kampusu and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The aim of this paper is to investigate the relationship between the Fly-paper effect (FPE) and possible errors in the specification of econometric models used in the empirical analysis of FPE. Using desk research method to gathering and analyzing scientific papers considering different aspects of misspecification problem, it was executed classification of papers in three groups depending on the type of errors in the model specification: incorrect functional form, incorrect choice of explanatory variables and incorrect statements about stochastic error of model. Research results showed that the wrong specification of the model affects the presence or absence of FPE) and the size of the FPE. The originality of this paper is reflected in the original classification of scientific papers devoted to the problem of misspecification of regression models used for econometric modeling of FPE. The contribution of this work is reflected in the identification of possible errors in the specification of the model for the empirical analysis of FPE and their implications on the properties of the parameter estimates of the used model.

This paper attempts to investigate the association between local public finance and housing market. We deal with the potential endogeneity problem by utilizing two-stage-least-square (2SLS) model. Our empirical results suggest that (1) the average housing price is positively and significantly associated with local revenue. (2) The average housing price is positively associated with local expenditure, though not significantly. (3) The rise of average housing price is also proven to reduce the local deficit significantly. (4) While the flypaper effect is obvious in Taiwan's local expenditure, the opportunistic political business cycle theory is not so significant. [ABSTRACT FROM AUTHOR]

The author considers fiscal incentives of regional authorities in the system of federal intergovernmental relations. The aim of the study is to determine how the debt burden of Russian regions affects regional fiscal policy in the context of federal co-financing of expenditure obligations. The work employed the methods of grouping, one-dimensional cluster analysis, correlation analysis, and regression by generalized method of moments (system-GMM). The study found that the increase in the regional debt burden relates to a decrease in the level of local fiscal decentralization. Intensive debt financing of regional expenditures in 2013–2015 also reduces the willingness to regionally co-finance federal priorities. The author concludes that high debt burden reduces the fiscal incentives of regional authorities to co-finance federal initiatives and creates the risk of underfunding of national projects.

Using an unbalanced panel of 18 Uruguayan regional governments from 1991 to 2017, we explore the hypothesis of flypaper and asymmetrical effects on the regional public expenditures. Specifically, the flypaper hypothesis states that the propensity of sub-national governmental units to spend intergovernmental unconditional transfers is higher than the propensity to spend on the demand for regional public services by local private agents. The application of panel data techniques with the use of instrumental variables highlights the presence of sizeable flypaper effect but not asymmetry ones. Our estimations also identify that political economy factors play an important role in the regional budgeting processes in Uruguay. This paper contributes to the scarce empirical evidence about the effects of unconditional central government transfers on subnational finances for middle-income countries.

This paper extends the current literature by considering the existence of the flypaper effect internationally, with donor countries supplying foreign aid to recipient countries. The flypaper effect refers to the empirical anomaly associated with intergovernmental grants stimulating government expenditures more than can be explained by a pure income effect. The results reveal evidence of flypaper behavior such that for recipient countries one dollar of foreign aid raises public spending by $0.21-$0.42, whereas an equal increase in domestic income raises government expenditures by only $0.09-$0.16. Furthermore, we exploit variation in political institutions across countries and find that the flypaper effect is most pronounced in less democratic countries and find no flypaper effect in more democratic countries. This suggests that government officials are more likely to behave as expected by the median voter model when they are held accountable. Furthermore, countries with proportional, rather than majority/plurality, voting mechanisms do not display flypaper behavior. [ABSTRACT FROM AUTHOR]

A substantial portion of local government funding in Poland comes from intergovernmental transfers. It may lead to the flypaper effect, which means that external revenues contribute to greater local government spending than locally-collected revenues. This study analyses how different revenue categories influenced local government spending in Poland between 2009 and 2018. Panel econometric models are used to test a hypothesis about whether the flypaper effect occurred in that period and to identify the potential causes. The results confirm to some extent that all three levels of local government were affected by the flypaper effect, and they point to intergovernmental transfers (general grants, specific grants, and shares of corporate income tax revenue) as the main causes. The research findings can be of use in reforming local government funding legislation in Poland and other countries, especially when the size of the public sector and public spending need to be reduced. [ABSTRACT FROM AUTHOR]

• We conduct a laboratory experiment to examine the "flypaper effect". • Our design controls for the most important factors that may explain this effect. • We find consistent and robust evidence of a flypaper effect. • In particular, grants increase expenditures more than an equal increase in income. • These results can be explained by behavioral economics considerations. How do exogenous increases in resources to a government affect its expenditure decisions? Economic theory typically predicts that a lump-sum grant will have the same impact on government expenditures as an increase in income. However, empirical studies consistently find that government spending is stimulated far more by grants than by income; that is, grants have a "flypaper effect" because the money "sticks where it hits". We conduct a laboratory experiment that controls for the most important factors that have been suggested in explaining the existence of the flypaper effect. Our experimental design crosses four transfer delivery methods with three voting frameworks. We examine three payoff-equivalent transfer delivery methods, all relative to a fourth baseline treatment with no transfer: an increase in income, a subsidy (repayment) for expenditures on the public good, and a lump-sum grant. Our two alternative voting frameworks are voting over levels of expenditures and voting over changes with information on public good externalities, each relative to a third baseline treatment where voting is over changes from a default (reference) level of expenditures. We find robust evidence of a flypaper effect: both the subsidy and the lump-sum grant increase expenditures more than does an equivalent increase in income. Our results are largely consistent with, and explained by, theoretical models that rely upon behavioral economics. [ABSTRACT FROM AUTHOR]

The paper analyzes the phenomenon of the flypaper effect – non-identical growth of inter-budget transfer and equivalent growth of private income for budget expenditures – in the relations between the budgets of the Northern entities of Russia and their local budgets for 2013–2016. We conduct comparative assessment of the budget response to changes in parameters of the private sector on the one hand; on the other hand, in parameters of relations with the budget of another level. The relevance of the proposed study of inter-budget relations lies in determining the effects of inter-budget redistribution and optimal expenditures at different levels of the budget system in the current system of distribution of expenditure obligations. The purpose of the present research is to reveal the consequences of allocation of non-target transfers from budgets of the entities in the Russian North from the point of view of fiscal incentives formed in the process of inter-budget relations and the models of behavior of local budgets created by these incentives. For the Republic of Karelia and the Sakhalin Oblast, the flypaper effect in inter-budget relations of regional and local budgets has been revealed. In the Arkhangelsk Oblast, Khanty-Mansi and Yamalo-Nenets autonomous okrugs, Kamchatka Krai, the republics of Komi and Sakha (Yakutia), the flypaper effect has not been revealed. It has been established that local budgets in the Republic of Karelia and the Sakhalin Oblast act in the interests of the regional budget to a relatively greater extent, they are more willing to expand production of local goods. In other regional budget systems, local budgets have a relatively more flexible fiscal policy, acting in the interests of local taxpayers, but at the expense of reducing regional benefits. It is assumed that budget systems of entities with the flypaper effect demonstrate lower differentiation of local and regional expenditures, which prevents decentralization; as well as higher dissatisfaction with the value of basic services in the public sector, which reduces the need for local differentiation. The author demonstrates the promising areas of interregional research. It has been revealed that the causes of the flypaper effect cannot be detected by analyzing traditional indicators of finance and regional economy

Penelitian ini menganalisis tentang fenomena flypaper effect pada belanja daerah Kabupaten/Kota di Indonesia. Penelitian ini menguji pengaruh Pendapatan Asli Daerah (PAD), Dana Alokasi Umum (DAU, Dana Alokasi Khusus (DAU) dan Dana Bagi Hasil (DBH) terhadap belanja daerah. Selain itu penelitian ini menggunakan variabel kontrol: jumlah penduduk, letak geografis (Jawa dan Luar Jawa) dan pemekaran wilayah. Sampel yang digunakan sebanyak 492 kabupaten/kota dengan kurun waktu 5 tahun dari tahun 2009 hingga 2013 sehingga sampel yang digunakan pada penelitian ini sebanyak 2413 data. Hasil penelitian menunjukkan bahwa variabel Pendapatan Asli Daerah, Dana Alokasi Umum, dan Dana Bagi Hasil berpengaruh positif terhadap belanja daerah, sedangkan variabel Dana Alokasi Khusus tidak berpengaruh terhadap belanja daerah. Semakin tinggi Pendapatan Asli Daerah, Dana Alokasi Umum, dan Dana Bagi Hasil akan meningkatkan belanja daerah, sedangkan nilai koefisien dana alokasi umum lebih besar dari nilai koefisien pendapatan asli daerah. Hal ini mengindikasikan bahwa Kabupaten/Kota di Indonesia lebih bergantung kepada Dana Alokasi Umum daripada Pendapatan Asli Daerah. Kabupaten/Kota lebih mengandalkan Dana Alokasi Umum dalam hal belanja daerah. Jadi, hasil pengujian mengindikasikan bahwa terjadi fenomena flypaper effect pada belanja daerah Kabupaten/Kota di Indonesia.

This article documents fiscal spillovers after an exogenous increase in the main federal transfer to Brazilian municipalities. We explore that Municipalities' Participation Fund is distributed according to the local population and abruptly changes at some thresholds. We disentangle spillovers using bordering municipalities near different cutoffs, showing that the flypaper effect in local economies can be partially explained by bordering municipalities' grants—roughly 20 percent. Fiscal spillovers are generally positive, except for spending in public health and sanitation for some population ranges. [ABSTRACT FROM AUTHOR]

We report evidence from a series of laboratory experiments that focus on mental accounting of 'public funds'. Groups of three players decide upon how much to redistribute within the group. We measure the preference to redistribute when transfers are made either out of individual accounts (the players' own money) or out of a common account (the group's money). Since the common account is dissolved after each round and paid out to individuals, its size should not affect the decision to redistribute. The experiment is designed to control for anchoring as a potential confounding effect. We find that the size of the common account significantly affects redistribution behavior. Specifically, the transfer increases in the size of the common account. This effect is significantly more pronounced when the transfer is paid out of the common account (instead of the individual account). We interpret these findings as evidence for a flypaper effect due to mental accounting. [ABSTRACT FROM AUTHOR]

Copyright of Journal Public Administration & Social Management / Administração Pública e Gestão Social is the property of Administracao Publica e Gestao Social and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We analyze the response of municipalities to the occurrence of natural disasters in terms of spending behavior, use of upper‐tier transfers and recovery, using balance sheet data of about 8,000 Italian municipalities for the period 2000–2015, and the universe of earthquakes events. We find evidence of increasing expenditure for about 12 years after the shocks, with asymmetric responses between earthquake‐related and unconditional grants, and heterogeneous flypaper effects across the country. While in northern municipalities expenditure tends to regress to pre‐earthquake levels, southern municipalities stick to higher expenditure levels when grants drop. This evidence is coupled with a faster recovery of private income and housing prices in northern municipalities. [ABSTRACT FROM AUTHOR]

Abstract: Flypaper Effect: Before and After The Implementation of Accrual Government Accounting Standards. This study aims to determine the occurrence of flypaper effect on local governments before and after the implementation of Accounting Standards Government-based accruals. The method used in this research is multiple regression and paired t-test sample. This study shows that the phenomenon of flypaper effect decreases after the application of the standard. Nevertheless the reduction is small. This happens because there is no requirement and certainty of technical policy in giving general allocation fund. Therefore, institutional factors and technical policy certainty must be made.

This study aims to determine the effect of local revenue, general allocation funds and special allocation funds to local spending and economic growth as well as to find out the possibility of Flypaper Effect on District/City shopping in East Java Province. The population in this study is all districts/cities located in East Java Province. Data analysis was performed by panel data regression using Eviews 8 and Microsoft Excel 2010 program. The results of this study indicate that local revenues, general allocation funds, and special allocation funds have a positive and significant impact on district/city expenditure in East Java. Local revenues, general allocation funds, and special allocation funds have a positive and significant impact on the economic growth of districts/cities in East Java Province. While variable of regional expenditure has negative and significant influence on economic growth of district/city in East Java Province. Local revenues, general allocation funds and special allocation funds indirectly through regional expenditures on district economic growth in East Java Province are negative and regional expenditures are not proven to be intermediate variables. Value of Coefficient of General Allocation Fund and Special Allocation Fund is bigger than the value of the original revenue coefficient so that it can be said that there has been Flypaper Effect on the expenditure of District/City in East Java Province in 2010-2014.

Flypaper Effect Analysis of District and City Regionally Spending in Sulawesi This study aims to determine the phenomenon of flypaper effect of regionally spending in Sulawesi. Types of data use secondary data about regionally original income, general allocation fund, special allocation fund, tax-sharing fund, and regionally spending in 2016–2017. Data analysis using panel data regression analysis. Result of research, found flypaper effect of regional spending from special allocation fund, whereas from general allocation fund and tax-sharing fund is not found. This study also proves that regionally spending, general allocation fund, special allocation fund, and tax-sharing fund have a significant influence on regionally spending in Sulawesi. Keywords: Regionally Spending; Flypaper Effect; Panel Data Models Abstrak Penelitian ini bertujuan mengetahui fenomena flypaper effect belanja daerah di Sulawesi. Jenis data menggunakan data sekunder tentang pendapatan asli daerah, dana alokasi umum, dana alokasi khusus, dana bagi hasil pajak, dan belanja daerah tahun 2016–2017. Analisis data menggunakan analisis regresi data panel. Hasil penelitian menemukan adanya flypaper effect pada belanja daerah dari dana alokasi khusus, sedangkan dari dana alokasi umum dan dana bagi hasil pajak tidak ditemukan. Penelitian ini juga membuktikan pendapatan asli daerah, dana alokasi umum, dana alokasi khusus, dan dana bagi hasil pajak berpengaruh signifikan terhadap belanja daerah seluruh kabupaten/kota di Sulawesi.

This research will focus on the general allocation fund, investment and population growth factors towards regional revenue consisting of Regional Tax and Non Tax Revenue Posts. The analysis also focused on the analysis of the presence or absence of the flypaper effect on the realization of the Padang City Government's GRDP before and after regional autonomy. This research is classified as descriptive and associative research and also expo facto. Data on all variables in this study began from 1980 until 2018 in the city of Padang. Analysis of the data used in this study uses regression analysis. The analysis shows that 1) general allocation fund has a significant effect on Padang City original local government tax 2) Investment has no significant effect on Padang City original local government tax 3) Regional autonomy policy has a significant effect on Padang City original local government tax 4) Population Growth has no significant effect on Padang City original local government tax 5) DAU has a significant effect on Padang City original local government non-tax 6) Investment has no significant effect on Padang City original local government non-tax 7) Regional autonomy policy has no significant effect on Padang City original local government non-tax 8) Population growth has a significant effect on Padang City original local government non-tax 9) original local government tax has a significant effect on regional expenditure in Padang City 10) original local government nontax has a significant effect on regional expenditure in Padang City 11) No flypaper effect occurs on regional expenditure on the realization of the Padang City Regional Budget. [ABSTRACT FROM AUTHOR]

North-eastern states in India are the most fiscally stressed states. Due to their unfavourable geographical terrain, the states have limited capacity to mobilise revenue from own sources, which has made them excessively dependant on intergovernmental fiscal transfers. In this regard, the study, at the outset, attempts to understand the underlying issues in devolutions of functions, functionaries and finances, and subsequently empirically explores the issues in fiscal decentralisation to the PRIs through flypaper effect for these states using local level fiscal data. Notwithstanding sparse own revenues of the PRIs, the result from Arellano-Bond dynamic panel model shows that local expenditure is more responsive to local own revenues than transfers, hence, there is no flypaper effect. The sparse and incongruous devolutions of functionaries and finances relating to the devolved functions signify that the completion of clear activity mapping is imperative so that the the devolved funds would not go wasted. [ABSTRACT FROM AUTHOR]

We investigate how lump-sum equalization transfers affect expenditures and taxes in the municipalities of the largest German state North Rhine- Westphalia. In general, those general-purpose transfers cannot be treated as exogenous variables. Thus, for the identification of causal effects, two exogenous adjustments in the transfer allocation formula are used as instrumental variables. Findings suggest the existence of the "flypaper effect" - municipalities use transfers to increase expenditures but do not reduce tax rates. Extra money from transfers is mainly used to finance social expenditures and public facilities. A set of robustness checks, including a spatial dependence model, confirm the results. [ABSTRACT FROM AUTHOR]

Objective - Changes in financial authority as a result of decentralization are expected to make provinces in Indonesia become more flexible in approving their finances. However, it goes beyond central government transfers which make local governments more consumptive, which impacts on the phenomenon of the effect of flypaper. This study aims to identify the influence of the government's fiscal on regional expenditure and identify the effect of flypaper on the regional expenditure in Kalimantan. Methodology/Technique - The research uses panel data from 56 regencies and cities on Kalimantan Island. Pooled least square method is used. Findings - The results show that intergovernmental fiscal revenue has a significant relationship with expenditure. Further, the flypaper effect occurs in regional expenditure which means that districts and cities in Kalimantan are still dependent on the central government to finance regional expenditures. They are not able to maximize their respective regional income. Novelty - These results indicate that the existence of local revenue derived from taxes has not been able to be optimally absorbed. Thus, dependence on intergovernmental transfers is very high. In addition, the flypaper effect also indicated that the intervention of the central government came into regional development planning programs. [ABSTRACT FROM AUTHOR]

This research analyze the possibility of flypaper effect on Operating Expenditure (OE) and Capital Expenditure (CE) of the City Government in Indonesia. The research also tested the effect of the Original Regional Revenue (ORR) and the General Allocation Fund (GAF) against OE and CE in the period of 2010-2012. Types of data used was the data panel, which is a combination data 2010-2012 time series and cross section 56 city. This research used panel data regression analysis which is estimated by Fixed Effect Model (FEM) and Random Effect Model (REM). The results of this research indicate that the ORR and GAF have positive and significant effect on OE. Furthermore this research find that flypaper effect occurs in OE. But the GAF is not significant to the CE. The ORR have a positive and significant effect on CE. Furthermore this research find that flypaper effect does not occur on CE.

In Brazil much of the revenues of municipalities are composed of government transfers from upper levels of government. This is more evident in the northeast region where the level of socioeconomic development is low. According to this fact the study aims to verify if government transfers expand municipal expenditures more than the increase of local income. In particular we are interested in obtaining evidence as a fiscal illusion in municipalities. For this purpose a panel data model was used with municipalities in the Brazilian Northeast between 2007 and 2012. The results indicate the presence of fiscal illusion. In addition, expenditures are more sensitive to increases in government transfers than increases in local income. [ABSTRACT FROM AUTHOR]

Restrictions like work requirements and constraints on voucher transfers are often used in social welfare systems, but little empirical evidence exists on their impact on wellbeing. We conducted a 10-day randomized experiment with 432 individuals living below the poverty line in the Kawangware settlement of Nairobi, Kenya, testing two elements of social welfare design: workfare versus welfare and restricted versus unrestricted vouchers. Participants were randomly assigned to a “Work” condition, involving daily work for unrestricted vouchers, or one of two “Wait” conditions, involving daily waiting for vouchers that were either unrestricted or partially restricted to staple foods. We find that working improved psychological wellbeing relative to waiting, suggesting that the means of implementing welfare programs may have important effects on individuals beyond the impact of monetary benefit alone. Furthermore, although the restrictions were inframarginal, partially restricted vouchers crowded-in spending on staple foods, suggesting the existence of a “flypaper effect” in spending from restricted vouchers. [ABSTRACT FROM AUTHOR]