Flypaper effect
economic assertion that "money sticks where it hits"
The flypaper effect is a concept from the field of public finance that suggests that a government grant to a recipient municipality increases the level of local public spending more than an increase in local income of an equivalent size. When a dollar of exogenous grants to a community leads to significantly greater public spending than an equivalent dollar of citizen income: money sticks where it hits, like a fly to flypaper. Grants to the government will stay in the hands of the government and income to individuals will stay with these individuals.
Founding
The concept was first described in a metaphorical way by Arthur Okun in response to the research of his colleague Edward Gramlich, which was published in 1979 as The Stimulative Effects of Intergovernmental Grants. Gramlich, together with Courant and Rubinfeld, sought an explanation for the phenomenon that nonmatching grants stimulate much more local spending per dollar of grant than does income going to private citizens within the community. The flypaper effect in this paper is defined as: "bureaucrats and politicians find it easier to avoid cutting taxes when the government receives revenue-sharing monies than they do to raise taxes when some exogenous event raises the income of the community."
In this case, the finding was that a grant from federal government to local government would raise spending of that local government by a greater amount than an equivalent increase in local income. Local public resources come from both fiscal transfers from the central government in the form of grants and from the income of individuals. Henderson and Gramlich specified the demand equations of individuals by maximizing their utility subject to that individual's income constraint, which is specified as the sum of personal income and the individual's share of his government's unconstrained fiscal transfers. This specification would mean that the individual income and the individual's share of the fiscal transfers would have an identical impact on spending. The Flypaper effect however suggests that this is not the case.
This brief starts where responsible research should: with the source description of “Flypaper effect” as economic assertion that "money sticks where it hits". Everything that follows is an evidence route, not borrowed authority.
Why this record matters
The subject matters to the general reference register because the source frames it as economic assertion that "money sticks where it hits". Its deeper value depends on whether names, dates, institutions and citations support that framing.
The citation trail is more important than the brevity of the summary: it shows where individual claims can be examined in context. The source revision retrieved here is dated Aug 4, 2025. The linked authority identifier is Q2743502. None of the 0 selected statements returned an explicit reference. The first chronological checks are 1979.
A concise general-reference account can conceal disagreements about scope, terminology or the weight assigned to individual sources. The source lead contains qualifying language; that uncertainty should survive quotation, summary and reuse. Authority statements aid reconciliation but still require their own references, qualifiers and ranks to be checked.
How to read it
Use the entry as an orientation point, then follow its citations and revision history. Names, dates and institutional relationships should be checked against the original record.
- Subject orientation
- Search vocabulary
- Locating named sources
The closest primary source, responsible institution and strongest cited specialist reference.
Three-step research path
- Establish the record: confirm the title “Flypaper effect”, its source revision and the description used here.
- Expand the search: follow Flypaper effect primary sources, Flypaper effect archive and Flypaper research across catalogues and specialist indexes.
- Test the account: compare the strongest cited source with the responsible institution’s current record and note any disagreement.
Questions for further research
- Which source most directly establishes the central claim about “Flypaper effect”?
- What terminology or title could unlock a more precise catalogue search?
- Which cited source is closest to the event, object or claim?
Search terms from this dossier
This entry incorporates text from “Flypaper effect” on English Wikipedia. Contributors are listed in the page history. Text is available under the Creative Commons Attribution-ShareAlike 4.0 License. Selected authority identifiers and statements are retrieved from Wikidata under CC0; their references and qualifiers remain part of the verification path.