Electoral Competition as a Determinant of Fiscal Decentralization
AbstractFiscal decentralization is high on the agenda in policy fora. This paper empirically investigates the underlying causes of fiscal decentralization, based on the predictions of a simple political economy model. We argue that the likeliness that a central government engages in devolution of powers depends in important ways on the political forces that it faces, the theory’s main insight being that the central government’s electoral strength should, all else being equal, decrease that government’s share of spending. Consistent with the model’s predictions, empirical results from a panel of democracies support the relevance of political factors as determinants of fiscal decentralization. The relationship between central government electoral strength and both expenditure and revenue centralization emerges as negative and non-linear.
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Bibliographic InfoPaper provided by Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke in its series Cahiers de recherche with number 11-11.
Length: 27 pages
Date of creation: 26 Aug 2011
Date of revision:
Fiscal decentralization; Fiscal federalism; Vertical interactions; Partial De-centralization; Elections;
Other versions of this item:
- Mario Jametti & Marcelin Joanis, 2011. "Electoral Competition as a Determinant of Fiscal Decentralization," Quaderni della facoltÃ di Scienze economiche dell'UniversitÃ di Lugano 1107, USI Università della Svizzera italiana.
- Mario Jametti & Marcelin Joanis, 2011. "Electoral Competition as a Determinant of Fiscal Decentralization," CESifo Working Paper Series 3574, CESifo Group Munich.
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-09-05 (All new papers)
- NEP-CDM-2011-09-05 (Collective Decision-Making)
- NEP-POL-2011-09-05 (Positive Political Economics)
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.:
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