Ecological Fiscal Transfers and State-level Budgetary Spending in India: Analyzing the Flypaper Effects

Amandeep Kaur, Ranjan Kumar Mohanty, Lekha S. Chakraborty and Divy Rangan

Economics Working Paper Archive from Levy Economics Institute

Abstract: Using panel data models, we analyze the flypaper effects--whether intergovernmental fiscal transfers or states' own income determine expenditure commitments--on ecological fiscal spending in India. The econometric results show that the unconditional fiscal transfers, rather than the states' own income, determine ecological expenditure in the forestry sector at subnational levels in India. The results hold when the models are controlled for ecological outcomes and demographic variables.

Keywords: Intergovernmental Transfers; Flypaper Effect; Public Expenditures; Forestry Sector (search for similar items in EconPapers)
JEL-codes: E6 H5 H7 Q5 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-env, nep-mac, nep-pke and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Ecological Fiscal Transfers and State-level Budgetary Spending in India: Analysing The Flypaper Effects (2021)
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