Empirical studies of the effects of intergovernmental grants to localities do not support standard microeconomic predictions. Block grants have surprisingly large positive effects on public expenditures. Researchers have attributed this quot;flypaper effectquot; to imperfect information (fiscal...

Although there are strong theoretical reasons to regard optimal zoning and fiscal policies as simultaneous decisions, most empirical studies have focused on one type of decision or the other. Even fewer attempts have been made to study interdependencies between competing towns in their selection...