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Structural Shifts in the Treatment of Intergovernmental Aid: The Case of Rural Roads

Published online by Cambridge University Press:  28 April 2015

Steven C. Deller
Affiliation:
Department of Agricultural Economics, University of Wisconsin-Madison, Madison, WI
Norman Walzer
Affiliation:
Department of Economics, Western Illinois University, Macomb, IL
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Abstract

The effects of structural shifts in the treatment of intergovernmental aid during the 1980s are tested using a sample of 1,929 rural counties with local road responsibilities. A dynamic model is used to test the hypothesis that local public officials treated intergovernmental aid differently after the Reagan/Bush policy of Fiscal Federalism was implemented. Empirical findings from the dynamic model are that Federal aid was much more stimulative at the end of the decade than in earlier years but the effects of state aid remained the same throughout the 1980s. These differences are attributed to a perception that Federal aid is less certain and more transitory than permanent.

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Articles
Copyright
Copyright © Southern Agricultural Economics Association 1995

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