Fiscal Decentralization, Commitment and Regional Inequality: Evidence from State-level Cross-sectional Data for the United States
AbstractConventional approaches to fiscal decentralization suggest that decentralization lowers the power of redistribution, but recent theories argue that fiscal decentralization can work as a commitment device. The former effect is argued to cause an increase in inter-county inequality, while the latter suggests a decrease. This article first clarifies the relationship between fiscal decentralization and inter-county inequality by using cross-sectional data for the United States. Our result indicates that the achievement of autonomy by fiscal decentralization in poor (low-income) counties contributes to decreased inter-county inequality, but that this effect is not as large as the dominating adverse effect fiscal decentralization has on rich (highincome) counties.
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Bibliographic InfoArticle provided by Journal of Income Distribution in its journal Journal of Income Distribution.
Volume (Year): 18 (2009)
Issue (Month): 1 (March)
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fiscal decentralization; inter-county inequality; commitment;
Other versions of this item:
- Nobuo Akai & Masayo Sakata, 2005. "Fiscal Decentralization, Commitment and Regional Inequality: Evidence from State-level Cross-sectional Data for the United States," CIRJE F-Series CIRJE-F-315, CIRJE, Faculty of Economics, University of Tokyo.
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
- H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
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