How does fiscal decentralization affect aggregate, national, and subnational government size?
AbstractBeyond conducting the usual regression analysis of the relationship between fiscal decentralization and aggregate government size (national and subnational combined), this paper makes the first attempt to examine how different fiscal decentralization measures affect the sizes of national and subnational (state and local combined) governments. An econometric analysis using panel data from 32 industrial and developing countries, 1980¨C1994, finds that (1) expenditure decentralization leads to smaller national governments, larger subnational governments, and larger aggregate governments; (2) revenue decentralization increases subnational governments by less than it reduces national governments, hence leads to smaller aggregate governments; and (3) vertical imbalance tends to increase the sizes of subnational, national, and aggregate governments.
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Bibliographic InfoPaper provided by China Economics and Management Academy, Central University of Finance and Economics in its series CEMA Working Papers with number 72.
Date of creation: 2000
Date of revision:
Publication status: Published in Journal of Urban Economics, Volume 52, Issue 2, September 2002, Pages 270-293
Fiscal decentralization; Size of government; Vertical imbalance; Borrowing constraints;
Other versions of this item:
- Jin, Jing & Zou, Heng-fu, 2002. "How does fiscal decentralization affect aggregate, national, and subnational government size?," Journal of Urban Economics, Elsevier, vol. 52(2), pages 270-293, September.
- H5 - Public Economics - - National Government Expenditures and Related Policies
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
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