Fiscal Decentralization and Public Sector Employment: A Cross-Country Analysis
Abstract
This paper investigates the relationship between public sector employment and fiscal decentralization. We develop a theoretical framework modeling the interactions between the central and sub-national executives regarding the level of public employment at the central and sub-national government levels. In our empirical work, based on a large cross-country dataset, we find that, ceteris paribus, the level of total public sector employees in a country increases with its level of fiscal decentralization. Even though central government employment decreases with decentralization, this is more than fully offset by the increase in employment at the sub-national level accompanying decentralization. Our empirical results also indicate that the relationship between GDP per capita and public sector employment is not monotonic but quadratic, that total public sector employment is higher in unitary countries vis-à-vis federal countries, and that public employment increases with the country’s international economic openness.Download Info
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Paper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper0903.Length: 49 pages
Date of creation: 01 Mar 2009
Date of revision:
Handle: RePEc:ays:ispwps:paper0903
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Related research
Keywords: fiscal decentralization; public sector employment; public sector size;This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-17 (All new papers)
- NEP-PBE-2009-07-17 (Public Economics)
References
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Jorge Martinez-Vazquez & Juan Luis Gómez-Reino, 2011.
"An International Perspective on the Determinants of Local Government Fragmentation,"
International Center for Public Policy Working Paper Series, at AYSPS, GSU
paper1121, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- Juan Luis Gómez-Reino & Jorge Martinez-Vazquez, 2012. "An International Perspective on the Determinants of Local Government Fragmentation," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1219, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- Wu, Alfred M. & Lin, Mi, 2010.
"Determinants of government size: Evidence from China,"
MPRA Paper
27089, University Library of Munich, Germany.
- Alfred Wu & Mi Lin, 2012. "Determinants of government size: evidence from China," Public Choice, Springer, vol. 151(1), pages 255-270, April.
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