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Ecological Fiscal Transfers and State-level Budgetary Spending in India: Analysing The Flypaper Effects in India

Amandeep Kaur (), Ranjan Kumar Mohanty (), Lekha Chakraborty () and Divy Rangan ()
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Amandeep Kaur: National Institute of Public Finance and Policy
Ranjan Kumar Mohanty: National Institute of Public Finance and Policy
Lekha Chakraborty: National Istitute of Public Finance and Policy

Working Papers from National Institute of Public Finance and Policy

Abstract: This paper examines the empirical evidence of flypaper effects in the ecological fiscal spending in India. Using the panel data models, we analyse whether the intergovernmental fiscal transfers, or the states' own income determine the expenditure commitments on ecology at the State level. The econometric results show that the intergovernmental fiscal transfers rather than the states' own income determines ecological expenditure at subnational levels in India. The results hold, when the models are controlled for ecological outcomes and demographic variables.

Keywords: Intergovernmental Transfers; Flypaper effect; Environmental Economics; Macroeconomic Policy; National Government Expenditure (search for similar items in EconPapers)
JEL-codes: E6 H5 H7 Q5 (search for similar items in EconPapers)
Pages: 19
Date: 2021-03
New Economics Papers: this item is included in nep-env and nep-mac
Note: Working Paper 332, 2021
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