Flypaper Effect
Version 1.0.0 · Updated 2026-07-31
CORE DEFINITION
Money sticks where it first hits, like flies to flypaper. When the central government gives a local government a special transfer payment (intended for tax reduction), the local government tends to spend the money (expand expenditures) rather than use it to reduce taxes for the people.
SCAFFOLDING EFFECT
Reduce cognitive load
Inertia of resource retention. Within a company, if you give a department an 'efficiency improvement budget,' they are likely to use it to hire more people or buy more expensive equipment, rather than actually returning the saved money to the company. Resources tend to be 'retained' by the handlers and consumed locally, rather than flowing to the optimal point of the system.
Anchor fast decisions
An increase in higher-level transfer payments leads to more local spending rather than tax reduction; money is spent as if stuck to flypaper, rather than returned according to residents' preferences.
MINIMUM ACTION
In progress 0/3Practice this model in one real situation:
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Source support: Explicit
- en.wikipedia.orghttps://en.wikipedia.org/wiki/Flypaper_effectverified
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