The dual illusion of grants-in-aid on central and local expenditures: A reply

In this Journal, Chu [Chu, H. Y. (2003). Public Choice, 114: 349-359] offered corrections for "inconsistencies" in the Logan model of dual fiscal illusion.] Logan, R. R. (1986). Journal of Political Economy,94: 1304-1318]. This paper shows that Logan (1986) introduced two prevailing models of fiscal illusion and chose to follow one of them for generalization. Chu has not corrected any "inconsistencies". He has instead offered a generalization of the other type of illusion. This paper demonstrates that the Chu generalization suffers from multiple irrational and unachievable results, which is why Logan (1986) chose the original version in the first place.