What shapes the flypaper effect? The role of the political environment in the budget process

Miriam Hortas-Rico, Vicente Rios and Pedro Pascual

No 2001, Working Papers. Collection B: Regional and sectoral economics from Universidade de Vigo, GEN - Governance and Economics research Network

Abstract: 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 fixed and time-period fixed effects. In particular, we analyse how differences in the degree of political competition and the local government’s 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 more political strength exhibit a lower flypaper effect.

Keywords: Flypaper effect; Political competition; Tax collection efficiency; Spanish Municipalities; Spatial Econometrics. (search for similar items in EconPapers)
JEL-codes: C1 H7 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2020-05
New Economics Papers: this item is included in nep-ure
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http://infogen.webs.uvigo.es/WPB/WP2001.pdf First version, 2020 (application/pdf)

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Journal Article: What shapes the flypaper effect? The role of the political environment in the budget process (2022)
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