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Fiscal Substitution in Spending for Highway Infrastructure: Working Paper 2021-13

Sheila Campbell and Chad Shirley

No 57430, Working Papers from Congressional Budget Office

Abstract: In this working paper, the Congressional Budget Office provides estimates of how much state and local governments that receive federal grants for highway capital projects substitute that funding for their own spending on highway capital. We find that state and local governments reduce their own per capita spending on highway capital by 26 cents for an additional dollar of annual federal formula grants; that finding is toward the lower end of a broad range of estimates in the existing literature. The rate of substitution decreases as state and local governments run larger

JEL-codes: E22 E62 H54 H72 H76 H77 R42 R53 (search for similar items in EconPapers)
Date: 2021-10-08
New Economics Papers: this item is included in nep-mac, nep-ppm and nep-ure
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Handle: RePEc:cbo:wpaper:57430