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ESTIMATING THE RESPONSIVENESS OF LOCAL REVENUE TO INTERGOVERNMENTAL AID

Local governments have become increasingly dependent on intergovernmental aid for revenue in recent years. The purpose of this paper is to integrate aid into a general model of revenue responsiveness. Explicit forms of aid variables are specified in accordance with the theory of grants literature. It is demonstrated that social service aid and discretionary, nonmatching aid significantly affected ownsource local revenues even in light of income growth and other revenue structure changes.