How municipalities react to budgetary windfalls

Bruno Heyndels and Frank Van Driessche

Economics of Governance, 2002, vol. 3, issue 3, 226 pages

Abstract: Using a panel of 308 observations over the period 1989–1996, we analyse how Flemish municipalities react to budgetary shocks. We address two questions: whether governments respond differently to tax than to grant windfalls and whether responses to positive and negative shocks are symmetric. Our results confirm the recent findings on U.S. local governments that reveal asymmetric responses to positive and negative windfalls. We also find evidence of different responsiveness to tax and grant windfalls. Copyright Springer-Verlag Berlin Heidelberg 2002

Keywords: Key words: Local government; public expenditures; windfalls; JEL Classification: H72; H77 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:spr:ecogov:v:3:y:2002:i:3:p:211-226

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DOI: 10.1007/s101010100040

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