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November 2015 Policy Study, Number 15-9


Impact of Federal Transfers On State and Local Own-Source Spending





Abbott, A. and Jones, P. (2012). Intergovernmental transfers and procyclical public spending. Economics Letters, 115(3):447–451.


Adkisson, R. V. and Mohammed, M. (2014). Tax structure and state economic growth during the Great Recession. The Social Science Journal, 51(1):79–89.


Alexander, F. K. (2010). Make “maintenance of effort” permanent. Inside Higher Ed. January 28.


Baicker, K. (2001). Government decision-making and the incidence of federal mandates. Journal of Public Economics, 82(2):147–194.


Baicker, K. (2005). The spillover effects of state spending. Journal of Public Economics, 89(2–3):529–544.


Brooks, L. and Phillips, J. H. (2010). An institutional explanation for the stick- iness of federal grants. The Journal of Law, Economics, & Organization, 26(2):243–264.


Chamberlain, A. (2013). The effect of federal intergovernmental grants on state taxes: New evidence of budget persistence. SSRN, or http: //


Clark, B. Y. and Whitford, A. B. (2011). Does more federal environmental funding increase or decrease states’ efforts? Journal of Policy Analysis and Management, 30(1):136–152.


Feiveson, L. (2015). General revenue sharing and public sector unions. Journal of Public Economics, 125:28–45.


Gamkhar, S. and Oates, W. (1996). Asymmetries in the response to increases and decreases in inter-governmental grants: Some empirical findings. National Tax Journal, 49(4):501–512.


Gordon, N. (2004). Do federal grants boost school spending? Evidence from Title I. Journal of Public Economics, 88:1771–1792.


Hines, J. R., Gale, W. G., and Knight, B. (2010). State fiscal policies and transitory income fluctuations [with comments and discussion]. Brookings Papers on Economic Activity, Fall:313–350.


Hines, J. R. and Thaler, R. H. (1995). The flypaper effect. The Journal of Economic Perspectives, 9(4):217–226.


Knight, B. (2002). Endogenous federal grants and crowd-out of state government spending: Theory and evidence from the Federal Highway Aid Program. The American Economic Review, 92(1):71– 92.


Kula, M. C. (2004). U.S. states, the Medicaid program, and tax smoothing. Southern Economic Journal, 70(3):490–511.


Oates, W. E. (1999). An essay on fiscal federalism. Journal of Economic Literature, 37(3):1120– 1149.


Payne, A. A. (2009). Does government funding change behavior? An empirical analysis of crowd out. Tax Policy and the Economy, 23(1):159–184.[Sager and Richard, 2014


Sager, M. and Richard, O. (2014). State and local governments’ fiscal outlook: 2014 update. United States Government Accountability Office, GAO-15-224SP.


Schuyler, M. (2014). A short history of government taxing and spending in the United States. Tax Foundation, Fiscal Fact No. 415.


Sobel, R. S. and Crowley, G. R. (2014). Do intergovernmental grants create ratchets in state and local taxes? Public Choice, 158(1–2):167–187.


Wrightson, M. T., Curda, E. H., Keller, B. J., Lee, A., Krashevski, R. S., and Fastrup, J. C. (1996). Federal grants: Design improvements could help federal resources go further. United States Government Accountability Office, AIMD-97-7.




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