This paper examines the empirical analysis of the five main hypotheses subsumed under the generic term fiscal illusion. After placing these hypotheses within a common theoretical framework, the paper attempts to evaluate empirical research into the revenue-complexity hypothesis, the revenueelasticity hypothesis, the flypaper effect, renter illusion, and debt illusion.

Abstract The present study attempted to experimentally analyze the effect of fiscal illusion in the form of Flypaper effect on spending demand levels of provincial governments in Iran. To this aim, theoretical foundations and literature review were presented, and then the model used for investigation was specified. Finally, using time series data for provinces of Iran during 2000-2013 estimat...

Many Regionals Government in Indonesia still rely on DAU allocations to finance regional expenditures and development without optimizing the potential of regions. When allocation obtained is large, regions will try keep next period at nominal value. PAD able local government a maximum 20%. This fact has led asymmetrical behavior government. The responds transfer funds form balancing funds, espe...

Pendapatan Asli Daerah (PAD) dan Dana Alokasi Umum (DAU) ialah dana daerah untuk menganggarkan Belanja Modal (BM) dalam menyediakan fasilitas layanan masyarakat agar menciptakan Pertumbuhan Ekonomi inklusif (PE), sehingga kesejahteraan dapat terpenuhi. Tujuan penelitian ini menguji hipotesis pengaruh PAD DAU terhadap BM, BM memediasi PE, PE masyarakat, kemungkinan Flypaper Effect pada BM. Popul...

This paper investigates the ways in which grants can be incorporated into the median voter model of local government expenditure. Grants can either be viewed as having income or price effects. Oakes suggested grants might affect the average price as perceived by the median voter. Our initial estimates seem to support this idea. However, econometric problems require a re-estimation of the model....