Decentralization and Local Governments' Performance: How Does Fiscal Autonomy Affect Spending Efficiency?
AbstractAll over the world, recent legislative reforms share the goal of increasing fiscal autonomy of lower tiers of governments. The aim of this policy is to reduce vertical fiscal imbalance (VFI) and enhance the efficiency in the provision of public services, via increased accountability of local politicians. The purpose of this paper is to assess whether inefficiency of local governments is really affected by the degree of VFI, relying on a sample of Italian municipalities to study the determinants of spending performance. Consistently with modern fiscal federalism theories, our results show that more fiscally autonomous municipalities exhibit less inefficient behavior, thus supporting the waves of reforms towards the devolution of taxing power to lower government tiers.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.
Volume (Year): 68 (2012)
Issue (Month): 3 (September)
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Other versions of this item:
- Lorenzo Boetti & Massimiliano Piacenza & Gilberto Turati, 2010. "Decentralization and Local Governments’ Performance: How Does Fiscal Autonomy Affect Spending Efficiency?," Working papers 11, Former Department of Economics and Public Finance "G. Prato", University of Torino.
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- 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
- R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
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- Bracalente, Bruno & Polinori, Paolo, 2010.
"L’efficienza tecnico-economica dei servizi pubblici locali: i casi delle farmacie comunali e dei servizi di igiene urbana
[Technical And Economic Efficiency Of Local Public Services: The Cases Of," MPRA Paper 34455, University Library of Munich, Germany.
- Torrisi, Gianpiero & Pike, Andy & Tomaney, John & Tselios, Vassilis, 2011. "Defining and measuring decentralisation: a critical review," MPRA Paper 51441, University Library of Munich, Germany.
- Agnese Sacchi & Simone Salotti, 2012. "A comprehensive anlysis of expenditure decentralization and of the composition of local public spending," Departmental Working Papers of Economics - University 'Roma Tre' 0155, Department of Economics - University Roma Tre.
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