Does Intergovernmental Transfers Cause Flypaper effect on Local Spending?
This study investigates whether the intergovernmental transfer leads to the flypaper effect in the province level during 1995-2002. By using the panel data, the results demon-strate that intergovernmental transfers cause the flypaper effect. Our findings also show that the flypaper effect exists heavily at east region as a backward area than west region as a well-developed area. This finding supports the previous research in districts and municipali-ties.
Keyword: Intergovernmental transfers, Local government, Flypaper Effect, panel data
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Economic Journal of Emerging Markets (EJEM)
ISSN 2086-3128 (print), ISSN 2502-180X (online)
Center for Economic Studies, Department of Economics,
Universitas Islam Indonesia, Indonesia.
EJEM by http://journal.uii.ac.id/JEP/ is licensed under a Creative Commons Attribution 4.0 International License.