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Fiscal Illusion at the Local Level: An Empirical Test Using Australian Municipal Data
Author(s) -
DOLLERY BRIAN,
WORTHINGTON ANDREW
Publication year - 1999
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1999.tb02432.x
Subject(s) - illusion , revenue , debt , test (biology) , economics , empirical research , local government , government (linguistics) , government revenue , empirical evidence , public economics , macroeconomics , finance , political science , psychology , cognitive psychology , public administration , statistics , paleontology , linguistics , philosophy , mathematics , epistemology , biology
This paper seeks to extend the literature on the empirical analysis of fiscal illusion in two ways. First, it provides a simultaneous test of four specific hypotheses subsumed under fiscal illusion, namely the revenue‐complexity, renter illusion, debt illusion and flypaper models. and second, it adds evidence drawn from the Australian institutional milieu to existing empirical work which has an overwhelming North American focus. Using 1991 data from 46 local government authorities in Tasmania, the results suggest significant support for revenue‐complexity, debt illusion, and the degree of indirectness of the revenue system.