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Fiscal Decentralization and Public Spending: Evidence from Heteroscedasticity-Based Identification

Author

Listed:
  • Herwartz Helmut

    (Department of Economics, Georg-August-University, Göttingen, Germany)

  • Theilen Bernd

    (Departament Economis, Universitat Rovira I Virgili Facultad de Ciencias Economicas y Empresariales, Reus, Spain)

Abstract

We analyse the instantaneous relation between public spending and expenditure decentralization by means of a novel identification scheme suggested in Lewbel (2012). Our cointegration, error-correction approach indicates that expenditure decentralization impacts negatively on total public spending and most of its subcategories.

Suggested Citation

  • Herwartz Helmut & Theilen Bernd, 2017. "Fiscal Decentralization and Public Spending: Evidence from Heteroscedasticity-Based Identification," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(2), pages 1-8, April.
    • Handle: RePEc:bpj:bejeap:v:17:y:2017:i:2:p:8:n:7
    DOI: 10.1515/bejeap-2016-0339
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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