Tax Decentralization and Public Deficits in OECD Countries
AbstractThis article explores the effect of sub-national tax autonomy and sub-national control over shared taxes on primary deficits with panel data for 23 OECD countries over the 1975--2000 period. The results suggest that sub-national tax autonomy has a U-shaped effect on primary deficits. We find that the "average" country in the sample could increase the fiscal stability of its public sector by reducing sub-national tax autonomy. There is also some indication that sub-national control over shared taxes increases fiscal stability, but we obtain this result only if Belgium and Spain are included in the sample. Copyright 2012, Oxford University Press.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Publius: The Journal of Federalism.
Volume (Year): 42 (2012)
Issue (Month): 4 (October)
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Other versions of this item:
- Baskaran, Thushyanthan, 2011. "Tax decentralization and public deficits in OECD countries," MPRA Paper 35141, University Library of Munich, Germany.
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
- H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing
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