The flypaper effect in Mexican local governments

Laura Sour

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we present evidence of the flypaper effect on unconditional transfers in the Mexican municipalities during the 1990 to 2007 period. Using panel data, we also confirm an asymmetric effect. That is, authorities increase expenditures by a greater amount in response to an increase in transfers than the amount by which they reduce expenditures in response to a decrease in transfers (Gamkhar, 2000). These results are particularly relevant in light of the discussion that has developed in recent years about the need for a reform on the fiscal federalism in the country.

Keywords: descentralización; transferencias federales; gobiernos locales; decentralization; federal transfers; flypaper; local governments; Mexico, Latin America (search for similar items in EconPapers)
JEL-codes: A1 A2 H1 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

Published in Estudios Económicos 1.28(2013): pp. 165-186

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Journal Article: The flypaper effect in Mexican local government (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:115591

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