Advanced Search
MyIDEAS: Login to save this paper or follow this series

Fiscal decentralization and the size of the government : an extension with evidence from cross-country data

Contents:

Author Info

  • Ehdaie, Jaber
Registered author(s):

    Abstract

    Prior analyses of the relationship between fiscal decentralization and the size of government treat fiscal decentralization as the decentralization of either taxing or spending powers. But decisions about taxation and spending are inseparable. The author corrects this deficiency and analyzes the effect of simultaneous decentralization of taxing and spending powers -"fiscal decentralization"- on the overall size of the public sector using cross-country data. The economic results of his study show that: (a) The simultaneous decentralization of the national government's taxing and spending powers tend to reduce the size of the public sector. (b) The Revenue-sharing arrangements in which decisions about taxation are made by the national government tend to eliminate the constraining effect of the decentralized spending power. What do these findings suggest? Countries, such as economies in transition, that want to reduce the size of the public sector should decentralize both taxing and spending decisions.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/1994/12/01/000009265_3970716142007/Rendered/PDF/multi0page.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1387.

    as in new window
    Length:
    Date of creation: 31 Dec 1994
    Date of revision:
    Handle: RePEc:wbk:wbrwps:1387

    Contact details of provider:
    Postal: 1818 H Street, N.W., Washington, DC 20433
    Phone: (202) 477-1234
    Email:
    Web page: http://www.worldbank.org/
    More information through EDIRC

    Related research

    Keywords: Banks&Banking Reform; Municipal Financial Management; National Governance; Public Sector Economics&Finance; Economic Theory&Research;

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Philip J. Grossman, 1989. "Federalism and the Size of Government," Development Research Unit Working Paper Series archive-08, Monash University, Department of Economics.
    2. Nelson, Michael A, 1987. "Searching for Leviathan: Comment and Extension," American Economic Review, American Economic Association, vol. 77(1), pages 198-204, March.
    3. Grossman, Philip J, 1992. "Fiscal Decentralization and Public Sector Size in Australia," The Economic Record, The Economic Society of Australia, vol. 68(202), pages 240-46, September.
    4. Philip Grossman, 1989. "Fiscal decentralization and government size: An extension," Public Choice, Springer, vol. 62(1), pages 63-69, July.
    5. Bird, Richard & Wallich, Christine, 1993. "Fiscal decentralization and intergovernmental relations in transition economics : toward a systematic framework of analysis," Policy Research Working Paper Series 1122, The World Bank.
    6. Brennan, Geoffrey & Buchanan, James M., 1977. "Towards a tax constitution for Leviathan," Journal of Public Economics, Elsevier, vol. 8(3), pages 255-273, December.
    7. Marilyn Young & Michael Reksulak & William F. Shughart, 2001. "The Political Economy of the IRS," Economics and Politics, Wiley Blackwell, vol. 13(2), pages 201-220, 07.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Jia, Junxue & Guo, Qingwang & Zhang, Jing, 2014. "Fiscal decentralization and local expenditure policy in China," China Economic Review, Elsevier, vol. 28(C), pages 107-122.
    2. Niklas Potrafke, 2006. "Political Effects on the Allocation of Public Expenditures: Empirical Evidence from OECD Countries," Discussion Papers of DIW Berlin 653, DIW Berlin, German Institute for Economic Research.
    3. Shah, Anwar & Thompson, Theresa, 2004. "Implementing decentralized local governance: a treacherous road with potholes, detours, and road closures," Policy Research Working Paper Series 3353, The World Bank.
    4. Meloche, Jean-Philippe & Vaillancourt, Francois & Yilmaz, Serdar, 2004. "Decentralization or fiscal autonomy ? What does really matter ? effects on growth and public sector size in European transition countries," Policy Research Working Paper Series 3254, The World Bank.
    5. Jorge Martinez-Vazquez & Robert McNab, 2001. "Fiscal Decentralization and Economic Growth," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0101, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    6. Wu, Alfred M. & Lin, Mi, 2010. "Determinants of government size: Evidence from China," MPRA Paper 27089, University Library of Munich, Germany.
    7. Kelly Edmiston, 2000. "Fostering Subnational Autonomy and Accountability in Decentralized Developing Countries: Lessons from the Papua New Guinea Experience," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0005, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    8. Ronald MacDonald & Paul Hallwood, 2004. "The Economic Case for Fiscal Federalism in Scotland," Working papers 2004-42, University of Connecticut, Department of Economics.
    9. Jon H. Fiva, 2005. "New Evidence on Fiscal Decentralization and the Size of Government," CESifo Working Paper Series 1615, CESifo Group Munich.
    10. Jorge Martinez-Vazquez & Robert McNab, 1997. "Fiscal Decentralization, Economic Growth, and Democratic Governance," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9707, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1387. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.