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The Impact of Local Decentralization on Economic Growth: Evidence from U.S. Counties

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Author Info

  • Hammond, George W.

    ()
    (West Virginia University)

  • Tosun, Mehmet S.

    ()
    (University of Nevada, Reno)

Abstract

We analyze the impact of fiscal decentralization on U.S. county population, employment, and real income growth. Our findings suggest that government organization matters for local economic growth, but that the impacts vary by government unit and by economic indicator. We find that single-purpose governments per square mile have a positive impact on metropolitan population and employment growth, but no significant impact on nonmetropolitan counties. In contrast, the fragmentation of general-purpose governments per capita has a negative impact on employment and population growth in nonmetropolitan counties. Our results suggest that local government decentralization matters differently for metropolitan and nonmetropolitan counties.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4574.

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Length: 35 pages
Date of creation: Nov 2009
Date of revision:
Publication status: published in: Journal of Regional Science, 2010, 20 (10), 1-18
Handle: RePEc:iza:izadps:dp4574

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Keywords: employment; population; nonmetropolitan; metropolitan; fiscal decentralization; income; spatial econometrics;

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References

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Citations

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Cited by:
  1. Mark D. Partridge & M. Rose Olfert, 2011. "The Winners' Choice: Sustainable Economic Strategies for Successful 21st-Century Regions," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(2), pages 143-178.
  2. Partridge, Mark D. & Rickman, Dan S., 2012. "Integrating regional economic development analysis and land use economics," MPRA Paper 38291, University Library of Munich, Germany.
  3. Anping Chen & Nicolaas Groenewold, 2011. "The National and Regional Effects of Fiscal Decentralisation in China," Economics Discussion / Working Papers 11-18, The University of Western Australia, Department of Economics.
  4. Dean Stansel, 2012. "Competition, knowledge, and local government," The Review of Austrian Economics, Springer, vol. 25(3), pages 243-253, September.
  5. Anping Chen & Nicolaas Groenewold, 2013. "The national and regional effects of fiscal decentralisation in China," The Annals of Regional Science, Springer, vol. 51(3), pages 731-760, December.
  6. Pierre Salmon, 2013. "Decentralization and growth: what if the cross-jurisdiction approach had met a dead end?," Constitutional Political Economy, Springer, vol. 24(2), pages 87-107, June.
  7. K. L. Devkota, 2014. "Impact of Fiscal Decentralization on Economic Growth in the Districts of Nepal," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1420, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

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