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Fiscal Decentralization and Economic Growth: A Cross-Country Study

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  • Davoodi, Hamid
  • Zou, Heng-fu

Abstract

We use a panel data set of 46 countries over the 1970¨C1989 period to investigate the relationship between fiscal decentralization and economic growth. We find a negative relationship between fiscal decentralization and growth in developing countries, but none in developed countries. Several explanations are offered for our findings.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 43 (1998)
Issue (Month): 2 (March)
Pages: 244-257

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Handle: RePEc:eee:juecon:v:43:y:1998:i:2:p:244-257

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Web page: http://www.elsevier.com/locate/inca/622905

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  1. Heng-fu Zou, 1994. "Taxes, Federal Grants, Local Public Spending, and Growth," CEMA Working Papers, China Economics and Management Academy, Central University of Finance and Economics 78, China Economics and Management Academy, Central University of Finance and Economics.
  2. Zou Heng-fu, 1994. "Dynamic Effects of Federal Grants on Local Spending," Journal of Urban Economics, Elsevier, Elsevier, vol. 36(1), pages 98-115, July.
  3. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 64, pages 416.
  4. Robert J. Barro, 1988. "Government Spending in a Simple Model of Endogenous Growth," NBER Working Papers 2588, National Bureau of Economic Research, Inc.
  5. Bird, Richard & Wallich, Christine, 1993. "Fiscal decentralization and intergovernmental relations in transition economics : toward a systematic framework of analysis," Policy Research Working Paper Series, The World Bank 1122, The World Bank.
  6. Oates, Wallace E., 1993. "Fiscal Decentralization and Economic Development," National Tax Journal, National Tax Association, National Tax Association, vol. 46(2), pages 237-43, June.
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