Fiscal Decentralization: A Remedy for Corruption?
AbstractThis paper examines the effect of fiscal decentralization in a country on the level of corruption. Using a tax competition framework with rent-seeking behavior, it is shown theoretically that fiscal decentralization, modeled as an increase in the number of competing jurisdictions, leads to a lower level of corruption. This result is then tested using a small, cross-country data set. The empirical results are not very strong, but they suggest that the hypothesized relationship between decentralization and corruption may indeed exist.
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Bibliographic InfoArticle provided by Springer in its journal International Tax and Public Finance.
Volume (Year): 11 (2004)
Issue (Month): 2 (03)
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Web page: http://www.springerlink.com/link.asp?id=102915
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