Fiscal decentralization, macrostability and growth
AbstractThis paper examines how fiscal decentralization may influence economic growth. Previous research on this question has primarily focused on the potential direct relationship between decentralization and growth. In this paper, we also examine the potential indirect influence of decentralization on growth through its impact on macroeconomic stability. We find that decentralization may positively influence price stability in developed countries, though this impact is much less clear in developing and transitional countries. We also find some evidence suggesting that decentralization may directly and negatively affect economic growth in higher-income countries but that this effect is reduced through the indirect positive impact of decentralization on growth through macroeconomic stability.
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Bibliographic InfoArticle provided by IEF in its journal Hacienda Pública Española/Revista de Economía Pública.
Volume (Year): 179 (2006)
Issue (Month): 4 (September)
Fiscal Decentralization; Economic Growth; and Macroeconomic Stability.;
Other versions of this item:
- Jorge Martínez-Vázquez & Robert M. McNab, . "Fiscal Decentralization, Macrostability And Growth," Working Papers 11-03 Classification-JEL , Instituto de Estudios Fiscales.
- Jorge Martinez-Vazquez & Robert McNab, 2005. "Fiscal Decentralization,Macrostability, and Growth," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0506, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- O20 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - General
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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