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Flypaper Effect Incorporating Spatial Interdependence

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  • Ajit Karnik
  • Mala Lalvani

Abstract

This paper examines the decentralization process in the state of Maharashtra. Among the states in India, Maharashtra's efforts at decentralization are regarded as a success story. Using cross†section data for 243 urban local governments, the paper examines the flypaper effect, that is, the expenditure stimulus of grants from the state government to the urban governments. The significance of spatial factors has been highlighted in the study. The models have been estimated using spatial econometric techniques. Most of the estimated models show the presence of the flypaper effect.

Suggested Citation

  • Ajit Karnik & Mala Lalvani, 2008. "Flypaper Effect Incorporating Spatial Interdependence," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 20(2), pages 86-102, July.
    • Handle: RePEc:bla:revurb:v:20:y:2008:i:2:p:86-102
    DOI: 10.1111/j.1467-940X.2008.00143.x
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    Cited by:

    1. Yihua Yu & Jing Wang & Xi Tian, 2016. "Identifying the Flypaper Effect in the Presence of Spatial Dependence: Evidence from Education in China's Counties," Growth and Change, Wiley Blackwell, vol. 47(1), pages 93-110, March.
    2. Roberto A. Trevino & Alan J. Richard, 2012. "Public Funding and Affordability of Substance Abuse Treatment Services," American Journal of Economics and Business Administration, Science Publications, vol. 4(1), pages 72-83, February.

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