Does the Flypaper Model Stick? A Test of the Relative Performance of the Flypaper and Conventional Models of Local Government Budgetary Behaviour

Two of the most widely referred to models of local (or state) budgetary behavior are developed and tested. The models considered are a variant of the flypaper model (see, for example, Courant et al., 1979 and Oates, 1979) and a conventional model which builds on the seminal work of Wilde (1969, 1971). The models are developed in a manner which allows them to be tested empirically using data for English local government. Two types of test are employed: the ability of the two models to explain the variation in expediture levels across local governments within any given fiscal year; the ability of the models to predict future levels of expenditure given changes to local government budget constraints (as brought about, for example, by changes in grants-in-aid from central government). Copyright 1991 by Kluwer Academic Publishers