The flypaper effect in Mexican local governments

  • Laura Sour Universidad Anáhuac México Norte
Keywords: descentralization, federal transfers, flypaper, local governments, Mexico, Latin America
JEL Classification: H77, H72, H54

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.

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Published
01-01-2013
How to Cite
SourL. (2013). The flypaper effect in Mexican local governments. Estudios Económicos, 28(1), 165-186. https://doi.org/10.24201/ee.v28i1.82
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