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On the measurement and impact of fiscal decentralization

Author

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  • Ebel, Robert D.
  • Yilmaz, Serdar

Abstract

The typical post-Bretton Woods era development approach that emphasized central government-led development efforts has changed dramatically, and local governments have clearly emerged as players in development policy. The thinking about what is important to achieve in development objectives is changing as fiscal decentralization reforms are being pursued by many countries around the world. In this context, a number of studies have attempted to quantify the impact of decentralization by relating some measure of it to economic outcomes of fiscal stability, economic growth, and public sector size. But decentralization is surprisingly difficult to measure. Nearly all cases examining the relationship between decentralization and macroeconomic performance have relied on the Government Finance Statistics (GFS) of the International Monetary Fund. However, despite its merits, GFS falls short in providing a full picture of fiscal decentralization. For some countries, however, there is data that more accurately captures fiscal responsibilities among different types of governments.

Suggested Citation

  • Ebel, Robert D. & Yilmaz, Serdar, 2002. "On the measurement and impact of fiscal decentralization," Policy Research Working Paper Series 2809, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2809
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    References listed on IDEAS

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    1. Bird, Richard M., 1993. "Threading the Fiscal Labyrinth: Some Issues in Fiscal Decentralization," National Tax Journal, National Tax Association, vol. 46(2), pages 207-27, June.
    2. Bird,Richard M. & Vaillancourt,François (ed.), 1999. "Fiscal Decentralization in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521641432.
    3. Roy Bahl, 1999. "Implementation Rules For Fiscal Decentralization," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9901, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    4. Bird, Richard M., 1993. "Threading the Fiscal Labyrinth: Some Issues in Fiscal Decentralization," National Tax Journal, National Tax Association;National Tax Journal, vol. 46(2), pages 207-227, June.
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