Expenditure Effects of Grants-in-Aid to Local Governments: Fungibility. Part II. Empirical Analysis of Local Expenditures and Fungibility Estimates

摘要

Part II of a study investigating the effect of intergovernmental grants on local public expenditures summarizes the results from an empirical analysis of actual local expenditures. It begins by briefly reviewing theoretical foundations presented in detail in Part I. It summarizes the empirical results, including empirical definitions of variables, data sources, and estimation procedures. Ordinary least-squares estimates are discussed first. More appropriate maximum likelihood estimates are presented and interpreted with respect to the fungibility of grant funds. Finally, the report offers conclusions, comments, and suggestions for future research. Tabular data, two appendices containing alternative definitions of community development expenditures and sample cities, and 21 references are included.