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The economic effects of federalism and decentralization—a cross-country assessment

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  • Stefan Voigt

    ()

  • Lorenz Blume

    ()

Abstract

This paper is based on the conjecture that institutional details matter and that attempts to estimate the economic effects of federalism by drawing on a simple dummy variable neglect potentially important institutional details. Based on a principal component analysis, seven aspects of both federalism and decentralization are used as variables for explaining differences in (1) fiscal policy, (2) government effectiveness, (3) economic productivity, and (4) happiness. The results show that institutional details do, indeed, matter. Different aspects of federalism impact on the outcome variables in different degrees. This study adds to our knowledge on the transmission mechanisms of federalism and decentralization.

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 151 (2012)
Issue (Month): 1 (April)
Pages: 229-254

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Handle: RePEc:kap:pubcho:v:151:y:2012:i:1:p:229-254

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Web page: http://www.springerlink.com/link.asp?id=100332

Related research

Keywords: Federalism; Decentralization; Fiscal federalism; Economic effects of constitutions; Constitutional economics; H71; H11;

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References

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  5. Lorenz Blume & Jens Müller & Stefan Voigt & Carsten Wolf, 2009. "The economic effects of constitutions: replicating—and extending—Persson and Tabellini," Public Choice, Springer, vol. 139(1), pages 197-225, April.
  6. Lars P. Feld & Gebhard Kirchgässner & Christoph A. Schaltegger, 2003. "Decentralized Taxation and the Size of Government: Evidence from Swiss State and Local Governments," CESifo Working Paper Series 1087, CESifo Group Munich.
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Cited by:
  1. Pierre Salmon, 2013. "Decentralization and growth: what if the cross-jurisdiction approach had met a dead end?," Constitutional Political Economy, Springer, vol. 24(2), pages 87-107, June.
  2. Andrés Rodríguez-Pose & Kristina Maslauskaite, 2011. "Can policy make us happier? Individual characteristics, socioeconomic factors, and life satisfaction in Central and Eastern Europe," Working Papers 2011-19, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
  3. Díaz Serrano, Lluís & Rodríguez Pose, Andrés, 2011. "Decentralization, happiness and the perception of institutions," Working Papers 2072/151812, Universitat Rovira i Virgili, Department of Economics.
  4. Diaz-Serrano, Luis & Rodríguez-Pose, Andrés, 2014. "Decentralization and the Welfare State: What Do Citizens Perceive?," MPRA Paper 54123, University Library of Munich, Germany.
  5. Pelinescu, Elena & Anton, Lucian Vasile & Ionescu, Raluca & Tasca, Radu, 2010. "The Analysis of Local Budgets and Their Importance in the Fight Against the Economic Crisis Effects," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(5), pages 17-32.
  6. Stefan Voigt, 2009. "Positive Constitutional Economics II—A Survey of Recent Developments," MAGKS Papers on Economics 200936, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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