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- Title
The Displacement of Local Spending for Pollution Control by Federal Construction Grants.
- Authors
Jondrow, James; Levy, Robert A.
- Abstract
It is well known that expenditure by the federal government can displace expenditure by private citizens and by state and local governments. Among the possible mechanisms for displacement, one is particularly direct. Federal expenditures provide services to recipients that replace, to some extent, what the recipients would have purchased on their own. Food stamps, for example, increase the income of recipients, but not necessarily their food purchases, a substantial part of the aid simply might pay for food the recipient would have bought on his own. The same kind of displacement can occur when the federal government provides grants-in-aid to a state or local government for spending on particular items. If displacement is large, the federal role could be reduced without greatly affecting the total expenditure on those items. In this article, the authors measure the extent to which state and local government spending on sewer system construction is displaced by construction grants. The Construction Grants Program provides federal funds to local governments for the construction of sewer lines and sewage treatment plants. The federal role is often justified by referring to the externalities in pollution control.
- Subjects
UNITED States; SEWERAGE design &; construction; POLLUTION control costs; PUBLIC spending; PUBLIC finance; UNITED States. Environmental Protection Agency; FEDERAL regulation; GOVERNMENT aid; INTERNATIONAL economic assistance
- Publication
American Economic Review, 1984, Vol 74, Issue 2, p174
- ISSN
0002-8282
- Publication type
Article