An Analysis of Local Government Expenditures on the Change of Unconditional Grants: Focusing on Asymmetric Flypaper Effect

2019 ◽  
Vol 23 (1) ◽  
pp. 365-389
Author(s):  
Jae young Kim
Keyword(s):  
Local Government ◽  
Government Expenditures ◽  
Flypaper Effect ◽  
Local Government Expenditures

THE EFFECT OF REVENUE SHARES ON LOCAL GOVERNMENT SPENDING: EVIDENCE FROM PHILIPPINE PROVINCES

2019 ◽  
pp. 1-35
Author(s):  
TRISTAN CANARE
Keyword(s):  
Local Government ◽  
Government Spending ◽  
Local Governments ◽  
Developing Economies ◽  
The Philippines ◽  
Government Expenditures ◽  
Empirical Literature ◽  
Marginal Effect ◽  
Fiscal Transfer ◽  
Local Government Expenditures

Intergovernmental fiscal transfer (IFT) is one of the several sources of funds of sub-national governments. There are two general types of IFT — conditional and unconditional. In many developing economies including the Philippines, the usual existing IFT is a form of unconditional fiscal transfer called revenue shares. In the Philippines, this revenue-sharing scheme is called the internal revenue allotment (IRA). Empirical literature says that unconditional IFTs are the type of fiscal transfers with the least effect on local government spending. The literature posits that the reason for this is that local governments use these transfers to substitute for own-sourced revenues such as local taxes. This explanation was formalized through a framework presented in this paper. Using panel data from Philippine provinces for the years 2001 to 2015, this paper attempted to determine the effect of revenue shares, in the form of IRA, on local government expenditures. Using different econometric methodologies, this paper arrived at several conclusions. First, IRA has a strong positive effect on total local government spending with a marginal effect slightly greater than one — much higher than what comparable studies found using data from other countries. Secondly, the effect of IRA on local government expenditures is even stronger for provinces with relatively greater ability to generate its own funds. Next, IRA and other externally sourced revenues have much stronger marginal effects on local government spending than do own-sourced revenues. Finally, IRA has widely varying effects on different components of local government expenditures.

Budget Adjustments in Response to Spending Variances: Evidence of Ratcheting of Local Government Expenditures

2007 ◽  
Vol 19 (1) ◽  
pp. 137-167 ◽  
Author(s):  
Tanya M. Lee ◽  
Elizabeth Plummer
Keyword(s):  
School Districts ◽  
Local Government ◽  
Private Sector ◽  
Government Spending ◽  
Differential Response ◽  
Competitive Environment ◽  
Government Expenditures ◽  
Instructional Expenditures ◽  
Local Government Expenditures ◽  
Texas School Districts

This paper examines the degree to which government administrators incorporate prior year spending variances into current year budgets. Government administrators have incentives to increase their budgets, and constraints on government spending are weaker than those found in the private sector. Therefore, we expect budget increases associated with prior year government overspending (actual exceeds budget) to be larger than decreases associated with underspending of the same amount. This differential response is called ratcheting. We examine budgets for 1,034 Texas school districts (1995 through 2002), and find budget ratcheting in operating expenditures and the subcategories of instructional and non-instructional expenditures. Ratcheting is most pronounced for non-instructional expenditures. We also find that budget ratcheting is more pronounced when controls on government spending are likely to be weaker. Specifically, budget ratcheting is more pronounced for school districts that operate in a less competitive environment and for districts that have less voter influence.

Assessment of Financial Capabilities of Local Governments in EU Countries for the Development of Local Public Services

2016 ◽  
Vol 14 (3) ◽  
pp. 379-397 ◽  
Author(s):  
Martina Halásková ◽  
Renata Halásková
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Public Services ◽  
Social Protection ◽  
Government Expenditure ◽  
Government Expenditures ◽  
Public Expenditures ◽  
Local Public Services ◽  
Local Government Expenditure ◽  
Local Government Expenditures

Local financing in advanced countries enables local governments to assess real local priorities as well as limitations. The present paper deals with financial capabilities of local governments for the development of public services, local government expenditure and fiscal expenditure decentralization in the EU28. By use of cluster analysis, local public expenditures are assessed by selected COFOG functions, as % of total local government expenditures in years 2010-2013. The results proved the largest differences in the set of countries in local government expenditures on social protection and the smallest differences in local expenditures on recreation and cultures, housing and community amenities.

THE EFFECTS OF INFLATION ON LOCAL GOVERNMENT EXPENDITURES

1974 ◽  
Vol 27 (4) ◽  
pp. 583-598 ◽  
Author(s):  
DAVID GREYTAK ◽  
RICHARD GUSTELY ◽  
ROBERT J. DINKELMEYER
Keyword(s):  
Local Government ◽  
Government Expenditures ◽  
Local Government Expenditures
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