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The real impact of a one-off fiscal restriction: empirical evidence of a flypaper effect in Flemish municipalities

Stijn Goeminne (), Carine Smolders and Elke Vandorpe

Public Money & Management, 2017, vol. 37, issue 4, 285-292

Abstract: This paper analyses the effects of a one-off fiscal restriction on Flemish local government spending. The authors provide evidence of a ‘flypaper effect’: fiscal restriction stimulated the sensitivity of local spending to grants. This means that higher-level governments (regional/national/supranational) need to take a flypaper effect into account when considering one-off fiscal restrictions on lower-level governments.

Date: 2017
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Handle: RePEc:taf:pubmmg:v:37:y:2017:i:4:p:285-292