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Fiscal Federalism and Economic Growth

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Author Info
Jan K. Brueckner () (Department of Economics, University of California-Irvine)

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Abstract

This paper uses an endogenous-growth model with overlapping generations to explore the connection between fiscal federalism and economic growth. The analysis shows that federalism, which allows public-good levels to be tailored to suit the differing demands of young and old consumers, who live in different jurisdictions, increases the incentive to save. This stronger incentive in turn leads to an increase in investment in human capital, and a byproduct of this higher investment is faster economic growth.

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File URL: http://www.economics.uci.edu/docs/2005-06/Brueckner-12.pdf
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Publisher Info
Paper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 050612.

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Length: 21 pages
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:irv:wpaper:050612

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Postal: Irvine, CA 92697-3125
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  1. Besley, Timothy & Coate, Stephen, 2003. "Centralized versus decentralized provision of local public goods: a political economy approach," Journal of Public Economics, Elsevier, vol. 87(12), pages 2611-2637, December. [Downloadable!] (restricted)
  2. Iimi, Atsushi, 2005. "Decentralization and economic growth revisited: an empirical note," Journal of Urban Economics, Elsevier, vol. 57(3), pages 449-461, May. [Downloadable!] (restricted)
  3. Xie, Danyang & Zou, Heng-fu & Davoodi, Hamid, 1999. "Fiscal Decentralization and Economic Growth in the United States," Journal of Urban Economics, Elsevier, vol. 45(2), pages 228-239, March. [Downloadable!] (restricted)
  4. Yakita, Akira, 2003. "Taxation and growth with overlapping generations," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 467-487, March. [Downloadable!] (restricted)
  5. Davoodi, Hamid & Zou, Heng-fu, 1998. "Fiscal Decentralization and Economic Growth: A Cross-Country Study," Journal of Urban Economics, Elsevier, vol. 43(2), pages 244-257, March. [Downloadable!] (restricted)
  6. Brueckner, Jan K, 1999. " Fiscal Federalism and Capital Accumulation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(2), pages 205-24. [Downloadable!] (restricted)
  7. Alesina, Alberto & Spolaore, Enrico, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1027-56, November.
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Koethenbuerger, Marko & Lockwood, Ben, 2007. "Does Tax Competition Really Promote Growth?," The Warwick Economics Research Paper Series (TWERPS) 810, University of Warwick, Department of Economics. [Downloadable!]
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  2. Floriana Cerniglia & Riccarda Longaretti, 2008. "Federalism, Education-Related Public Good and Growth when Agents are Heterogeneou," Working Papers 138, University of Milano-Bicocca, Department of Economics, revised May 2008. [Downloadable!]
  3. Borck, Rainald, 2007. "Federalism, Fertility and Growth," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  4. Kimiko Terai, 2008. "Interregional Disparities in Productivity and the Choice of Fiscal Regime," Working Papers 070813, University of California-Irvine, Department of Economics. [Downloadable!]
  5. Robert P. Inman, 2008. "Federalism's Values and the Value of Federalism," NBER Working Papers 13735, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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This page was last updated on 2008-9-30.

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