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Ecological Fiscal Transfers and State-level Budgetary Spending in India: Analysing The Flypaper Effects

Author

Listed:
  • Kaur, Amandeep
  • Mohanty, Ranjan
  • Chakraborty, Lekha S
  • Rangan, Divy

Abstract

This paper examines the empirical evidence of flypaper effects in the ecological fiscal spending in India. Using the panel data models, we analyse whether the intergovernmental fiscal transfers, or the states’ own income determine the expenditure commitments on ecology at the State level. The econometric results show that the intergovernmental fiscal transfers rather than the states’ own income determines ecological expenditure at subnational levels in India. The results hold, when the models are controlled for ecological outcomes and demographic variables.

Suggested Citation

  • Kaur, Amandeep & Mohanty, Ranjan & Chakraborty, Lekha S & Rangan, Divy, 2021. "Ecological Fiscal Transfers and State-level Budgetary Spending in India: Analysing The Flypaper Effects," MPRA Paper 111947, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:111947
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    References listed on IDEAS

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    1. Elena Gennari & Giovanna Messina, 2014. "How sticky are local expenditures in Italy? Assessing the relevance of the flypaper effect through municipal data," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(2), pages 324-344, April.
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    4. Sebastian Langer & Artem Korzhenevych, 2019. "Equalization Transfers and the Pattern of Municipal Spending: An Investigation of the Flypaper Effect in Germany," Annals of Economics and Finance, Society for AEF, vol. 20(2), pages 737-765, November.
    5. Robin Boadway & Anwar Shah, 2007. "Intergovernmental Fiscal Transfers : Principles and Practice," World Bank Publications - Books, The World Bank Group, number 7171.
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    Cited by:

    1. Chakraborty, Lekha, 2021. "Fiscal Federalism, Expenditure Assignments and Gender Equality," Working Papers 21/334, National Institute of Public Finance and Policy.
    2. Pandey, Rita & Gupta, Manish & Sachdeva, Paavani & Singh, Abhishek, 2021. "Financing Biodiversity and Ecosystems Conservation in India: Implications for Efforts and Outcomes," Working Papers 21/335, National Institute of Public Finance and Policy.
    3. Chakraborty, Lekha, 2021. "Mainstreaming Climate Change Commitments through Finance Commission's Recommendations," Working Papers 21/341, National Institute of Public Finance and Policy.

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    More about this item

    Keywords

    Intergovernmental Transfers; Flypaper effect; Environmental Economics; Macroeconomic Policy; National Government Expenditures;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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