Income inequality, decentralisation, and regional development in Western Europe
This paper deals with the relationship between decentralisation, regional economic development, and income inequality within regions. Using multiplicative interaction models and regionally aggregated microeconomic data for more than 100 000 individuals in the European Union (EU), it addresses two main questions. First, whether fiscal and political decentralisation in Western Europe has an effect on within-regional interpersonal inequality. Second, whether this potential relationship is mediated by the level of economic development of the region. The results of the analysis show that greater fiscal decentralisation is associated with lower interpersonal income inequality, but, as regional income rises, further decentralisation is connected to a lower decrease in inequality. This finding is robust to the measurement and definition of income inequality, as well as to the weighting of the spatial units by their population size. Keywords: income inequality, income per capita, fiscal and political decentralisation, interaction, regions, Europe
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.:
- T. S. Breusch & A. R. Pagan, 1980.
"The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics,"
Review of Economic Studies,
Oxford University Press, vol. 47(1), pages 239-253.
- Breusch, T.S. & Pagan, A.R., . "The Lagrange multiplier test and its applications to model specification in econometrics," CORE Discussion Papers RP 412, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Lessmann, Christian, 2009.
"Fiscal decentralization and regional disparity: Evidence from cross-section and panel data,"
Dresden Discussion Paper Series in Economics
08/09, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
- Christian Lessmann, 2009. "Fiscal Decentralization and Regional Disparity: Evidence from Cross-Section and Panel Data," Environment and Planning A, SAGE Publishing, vol. 41(10), pages 2455-2473, October.
- Christian Lessmann, 2009. "Fiscal decentralization and regional disparity: evidence from cross-section and panel data," Environment and Planning A, Pion Ltd, London, vol. 41(10), pages 2455-2473, October.
- Martinez-Vazquez, Jorge & McNab, Robert M., 2003.
"Fiscal Decentralization and Economic Growth,"
Elsevier, vol. 31(9), pages 1597-1616, September.
- 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.
- Iimi, Atsushi, 2005. "Decentralization and economic growth revisited: an empirical note," Journal of Urban Economics, Elsevier, vol. 57(3), pages 449-461, May.
- Blundell, Richard & Bond, Stephen, 1998.
"Initial conditions and moment restrictions in dynamic panel data models,"
Journal of Econometrics,
Elsevier, vol. 87(1), pages 115-143, August.
- R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
- Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
- Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
- Pranab Bardhan & Dilip Mookherjee, 2006. "Decentralisation and Accountability in Infrastructure Delivery in Developing Countries," Economic Journal, Royal Economic Society, vol. 116(508), pages 101-127, 01.
- Andreas P. Kyriacoua & Oriol Roca-Sagalésb, 2010.
"Fiscal and Political Decentralization and Government Quality,"
International Center for Public Policy Working Paper Series, at AYSPS, GSU
paper1005, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- Andreas P Kyriacou & Oriol Roca-Sagalés, 2011. "Fiscal and political decentralization and government quality," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 29(2), pages 204-223, April.
- Anselin, Luc & Moreno, Rosina, 2003.
"Properties of tests for spatial error components,"
Regional Science and Urban Economics,
Elsevier, vol. 33(5), pages 595-618, September.
- Neyapti, Bilin, 2006. "Revenue decentralization and income distribution," Economics Letters, Elsevier, vol. 92(3), pages 409-416, September.
- Zhang, Tao & Zou, Heng-fu, 2001.
"The growth impact of intersectoral and intergovernmental allocation of public expenditure: With applications to China and India,"
China Economic Review,
Elsevier, vol. 12(1), pages 58-81.
- Tao Zhang & Heng-fu Zou, 2000. "The growth impact of intersectoral and intergovernmental allocation of public expenditure: With applications to China and India," CEMA Working Papers 30, China Economics and Management Academy, Central University of Finance and Economics.
- Ebel, Robert D. & Yilmaz, Serdar, 2002. "On the measurement and impact of fiscal decentralization," Policy Research Working Paper Series 2809, The World Bank.
- Raul Livas Elizondo & Paul Krugman, 1992.
"Trade Policy and the Third World Metropolis,"
NBER Working Papers
4238, National Bureau of Economic Research, Inc.
- Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
- Florax, Raymond J. G. M. & Folmer, Hendrik & Rey, Sergio J., 2003.
"Specification searches in spatial econometrics: the relevance of Hendry's methodology,"
Regional Science and Urban Economics,
Elsevier, vol. 33(5), pages 557-579, September.
- Raymond J.G.M. Florax & Hendrik Folmer & Sergio J. Rey, 2002. "Specification Searches in Spatial Econometrics: The Relevance of Hendry's Methodology," Urban/Regional 0202001, EconWPA.
- Era Dabla-Norris, 2006. "The Challenge of Fiscal Decentralisation in Transition Countries," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 48(1), pages 100-131, March.
- Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
When requesting a correction, please mention this item's handle: RePEc:pio:envira:v:44:y:2012:i:6:p:1278-1301. 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 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.