Fiscal decentralization and regional disparities: evidence from several European Union countries
This paper investigates for the first time the relationship between fiscal decentralization and regional disparities in a set of European Union countries. Our findings reveal that the devolution of fiscal power to subnational governments is negatively correlated with the level of regional inequality within the sample countries. Therefore, the processes of fiscal decentralization may contribute to a more balanced distribution of resources across space, making up for the central government’s loss of redistributive power. In fact, this result is robust to the inclusion of additional explanatory variables in the analysis, and to the choice of the measure used to quantify the degree of dispersion in the spatial distribution of per capita income.
When requesting a correction, please mention this item's handle: RePEc:pio:envira:v:40:y:2008:i:5:p:1185-1201. 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: (Neil Hammond)
If references are entirely missing, you can add them using this form.