IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v15y1987i3p322-338.html
   My bibliography  Save this article

A Theory of Intergovernmental Grants and their Effect on Aggregate Grantor-Recipient Spending

Author

Listed:
  • Daniel P. Schwallie

Abstract

The impact of intergovernmental grants on the expenditures of recipients has been the focus of considerable investigation, while their impact on the relative sizes of the public and private sectors has been given little more than brief discussion. No well-defined structure has emerged to explain how a system of intergovernmental grants might affect public sector size. This article is a first attempt at such a structure. It investigates the impact of intergovernmental grants by comparing public sector size in the presence of conditional lump-sum grants to public sector size in their absence for given grantor and recipient preferences on the allocation of financial resources between the private and public sectors. Implications are drawn from the model and comments are made pertaining to the empirical investigations of grant effects on recipient governments spending.

Suggested Citation

  • Daniel P. Schwallie, 1987. "A Theory of Intergovernmental Grants and their Effect on Aggregate Grantor-Recipient Spending," Public Finance Review, , vol. 15(3), pages 322-338, July.
    • Handle: RePEc:sae:pubfin:v:15:y:1987:i:3:p:322-338
    DOI: 10.1177/109114218701500305
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/109114218701500305
    Download Restriction: no
    File URL: https://libkey.io/10.1177/109114218701500305?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Fisher, Ronald C., 1982. "Income and grant effects on local expenditure: The flypaper effect and other difficulties," Journal of Urban Economics, Elsevier, vol. 12(3), pages 324-345, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Raffaella Santolini, 2017. "Electoral Rules And Public Spending Composition: The Case Of Italian Regions," Contemporary Economic Policy, Western Economic Association International, vol. 35(3), pages 551-577, July.
    2. Singhal, Monica, 2008. "Special interest groups and the allocation of public funds," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 548-564, April.
    3. Saeid Mahdavi & Joakim Westerlund, 2017. "Are state–local government expenditures converging? New evidence based on sequential unit root tests," Empirical Economics, Springer, vol. 53(2), pages 373-403, September.
    4. Cont, Walter & Porto, Alberto, 2014. "Personal and regional redistribution through public finance in a federal setting," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(4), pages 563-578.
    5. Eric J. Brunner & David J. Schwegman, 2022. "Windfall revenues from windfarms: How do county governments respond to increases in the local tax base induced by wind energy installations?," Public Budgeting & Finance, Wiley Blackwell, vol. 42(3), pages 93-113, September.
    6. Ross, Justin M. & Yan, Wenli, 2013. "Fiscal Illusion From Property Reassessment? An Empirical Test of the Residual View," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(1), pages 7-32, March.
    7. Ke Wang & Venus Khim-Sen Liew, 2024. "The Impact of Vertical Fiscal Imbalances and Local Government Tax Efforts on the Quality of Economic Development—A Study Based on Threshold Regression and Simultaneous Equation Models," Sustainability, MDPI, vol. 16(8), pages 1-22, April.
    8. Daniel E. Ingberman & Robert P. Inman, 1987. "The Political Economy of Fiscal Policy," NBER Working Papers 2405, National Bureau of Economic Research, Inc.
    9. Goodspeed, Timothy J., 1998. "The Relationship Between State Income Taxes and Local Property Taxes: Education Finance in New Jersey," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(2), pages 219-238, June.
    10. Ryota Nakatani & Qianqian Zhang & Isaura Garcia Valdes, 2024. "Health Expenditure Decentralization and Health Outcomes: The Importance of Governance," Publius: The Journal of Federalism, CSF Associates Inc., vol. 54(1), pages 59-87.
    11. Wallace E. Oates & Wallace E. Oates, 2004. "An Essay on Fiscal Federalism," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 22, pages 384-414, Edward Elgar Publishing.
    12. Fisher, Ronald C. & Papke, Leslie E., 2000. "Local Government Responses to Education Grants," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(1), pages 153-168, March.
    13. Daniel P. Schwallie, 1989. "Measuring the Effects of Federal Grants-in-Aid on Total Public Sector Size," Public Finance Review, , vol. 17(2), pages 185-203, April.
    14. Jiang, Wei & Li, Xitao & Liu, Ruoxi & Song, Yijia, 2022. "Local fiscal pressure, policy distortion and energy efficiency: Micro-evidence from a quasi-natural experiment in China," Energy, Elsevier, vol. 254(PB).
    15. Joan Costa-Font & Filipe De-Albuquerque & Hristos Doucouliagos, 2015. "Does Inter-jurisdictional Competition Engender a “Race to the Bottom”? A Meta-Regression Analysis," Economics and Politics, Wiley Blackwell, vol. 27(3), pages 488-508, November.
    16. Rajaraman, Indira & Vasishtha, Garima, 2000. "Impact of grants on tax effort of local government," Working Papers 00/1, National Institute of Public Finance and Policy.
    17. Di Liddo Giuseppe & Longobardi Ernesto & Porcelli Francesco, 2019. "Fiscal Imbalances and Fiscal Effort of Local Governments," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(3), pages 1-7, July.
    18. Davis, Matt & Vedder, Andrea & Stone, Joe, 2015. "Local Tax Limits, Student Achievement, and School-Finance Equalization," MPRA Paper 63704, University Library of Munich, Germany.
    19. Connolly, Laura S., 1997. "Does external funding of academic research crowd out institutional support?," Journal of Public Economics, Elsevier, vol. 64(3), pages 389-406, June.
    20. Strumpf, Koleman S., 1998. "A predictive index for the flypaper effect," Journal of Public Economics, Elsevier, vol. 69(3), pages 389-412, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:15:y:1987:i:3:p:322-338. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.