INTERGOVERNMENTAL GRANTS AND GRANTOR GOVERNMENT OWN-PURPOSE EXPENDITURES
Author(s) -
Philip J. Grossman
Publication year - 1989
Publication title -
national tax journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.43
H-Index - 57
eISSN - 1944-7477
pISSN - 0028-0283
DOI - 10.1086/ntj41788816
Subject(s) - settlor , liberian dollar , perspective (graphical) , public finance , government (linguistics) , economics , empirical evidence , public economics , business , finance , political science , law , linguistics , philosophy , epistemology , artificial intelligence , computer science , macroeconomics
This paper examines the impact of intergovernmental grants on grantor government expenditures from the perspective of the grantor government politician. The theory and empirical evidence presented complement previous work that considered the impact of grants from the perspective of the voter/taxpayer. It is shown that the vote-maximizing objective of the grantor government politician will lead her to finance grants from both increased own-source taxation and reduced own-purpose expenditures. Empirical evidence suggests that an additional dollar of grants will reduce own-purpose expenditures by approximately $0.15.
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