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The flypaper effect revisited

Fernando Aragon ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper argues that there is nothing anomalous about the flypaper effect. I develop a simple median voter model of government spending with costly tax collection that predicts the flypaper effect and provide a quantifiable measure of its magnitude. Using the model insights and previous estimates, I show that a tax rate between 8% to 16% would account for the flypaper effect observed in U.S. subnational governments.

Keywords: flypaper effect; intergovernmental transfers; public finance; fiscal decentralization (search for similar items in EconPapers)
JEL-codes: J1 E6 (search for similar items in EconPapers)
Date: 2009-01
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Downloads: (external link)
http://eprints.lse.ac.uk/58199/ Open access version. (application/pdf)

Related works:
Working Paper: Local Spending, Transfers and Costly Tax Collection (2012) Downloads
Working Paper: The Flypaper Effect Revisited (2009) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:58199

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