چکیده:
The present study attempted to experimentally analyze the effect of fiscal illusion in the form of Flypaper effect on spending demand levels of provincial governments in Iran. To this aim، theoretical foundations and literature review were presented، and then the model used for investigation was specified. Finally، using time series data for provinces of Iran during 2000-2013 estimation and experimental analysis were performed. In Iran’s economy، the central government award grants to the provincial government which are mainly from oil revenues، so that this type of dedicated revenues to provincial governments were considered as the intergovernmental grant (from central government to the provincial government). The results show that in Iran، flypaper effect will be accepted in the provinces of Iran.
خلاصه ماشینی:
Source: research findings, Asterisks (*) denote level of significance: ***-90% Estimation and Results One of the econometrics methods to solve or reduce the problem of endogenous explanatory variables is the GMM method.
GMM dynamic panel data method is used when the number of cross-cutting variables (N) is greater than the number of time and years (T) (N> T) and this is also in study discussion; that means the number of sections (provinces) is greater than the number of times (Bond, 2002; Baltagi, 2008).
Arrelano & Bond (1991) maintain that in the estimation of GMM, residuals should have a first order correlation coefficient AR(1) but not a second-order correlation coefficient AR(2).
Table 4: Results of Estimating GMM Model Variable Coefficient t-Statistic Prob.
Fiscal Illusion at the Local Sphere: An Empirical Test of the Flypaper Effect using South African Municipal Data.
(1999) Fiscal Illusion and the Australian Local Government Grants Process: How Sticky is the Flypaper Effect?