Local Spending, Transfers and Costly Tax Collection

Fernando Aragon

Discussion Papers from Department of Economics, Simon Fraser University

Abstract: This paper studies the effect of costly taxation on the fiscal response of local governments to intergovernmental transfers. Using a panel dataset of Peruvian municipalities, I find robust evidence that central government's grants have a greater stimulatory effect in municipalities facing higher tax collection costs. The results are consistent with costly taxation partially explaining the flypaper effect.

Keywords: Flypaper effect; Intergovernmental transfers; Fiscal decentralization (search for similar items in EconPapers)
JEL-codes: H71 H77 (search for similar items in EconPapers)
Pages: 37
Date: 2012-05
New Economics Papers: this item is included in nep-acc, nep-geo, nep-mac, nep-pbe, nep-pub and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sfu.ca/repec-econ/sfu/sfudps/dp12-09.pdf (application/pdf)

Related works:
Journal Article: Local Spending, Transfers, and Costly Tax Collection (2013)
Working Paper: The Flypaper Effect Revisited (2009)
Working Paper: The flypaper effect revisited (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sfu:sfudps:dp12-09

Ordering information: This working paper can be ordered from
econ_research@sfu.ca

Access Statistics for this paper

More papers in Discussion Papers from Department of Economics, Simon Fraser University Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by Working Paper Coordinator (econ_research@sfu.ca).