Tax and grant illusion are envisioned as alternative forms of fiscal illusion in the literature, with differing implications for local government spending. This article shows that tax and grant illusion, previously thought to be separate sources of fiscal illusion, are in fact interdependent. It...

In the traditional certainty model of voter fiscal illusion, voters misperceive non-stochastic tax prices as being lower than they actually are and therefore allow public sector officials to expand output beyond the perfect information output. This article shows how modeling fiscal illusion as...