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Fiscal Federalism and Long-Run Macroeconomic Performance: A Survey of Recent Research

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  • Lars P Feld

    (Walter Eucken Institut, University of Freiburg, Goethestrasse 10, D-79100 Freiburg im Breisgau, Germany)

  • Jan Schnellenbach

    (Alfred Weber Institute for Economics, Ruprecht-Karls-Universität Heidelberg, Bergheimer Strasse 58, D-69115 Heidelberg, Germany)

Abstract

In this paper we offer both a broad survey of the literature on fiscal federalism and long-run economic performance, and a detailed report of some of our own recent studies in this field. We look at the difference between study types (cross-country versus single-country studies), and at the relevance of the broader institutional framework into which fiscal decentralization is embedded. We also look into structural change and intergovernmental transfers as a detailed mechanism through which federalism may have an impact on aggregate economic performance. It turns out that fiscal decentralization has no robust effect on growth, but the evidence hints at a positive effect on overall productivity, conditional on the broader institutional framework.

Suggested Citation

  • Lars P Feld & Jan Schnellenbach, 2011. "Fiscal Federalism and Long-Run Macroeconomic Performance: A Survey of Recent Research," Environment and Planning C, , vol. 29(2), pages 224-243, April.
  • Handle: RePEc:sae:envirc:v:29:y:2011:i:2:p:224-243
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    Cited by:

    1. Goel, Rajeev K. & Mazhar, Ummad & Nelson, Michael A. & Ram, Rati, 2017. "Different forms of decentralization and their impact on government performance: Micro-level evidence from 113 countries," Economic Modelling, Elsevier, vol. 62(C), pages 171-183.
    2. Charles B. Blankart, 2016. "Public Choice and Public Finance: A Survey," CESifo Working Paper Series 5819, CESifo Group Munich.
    3. Luis Diaz-Serrano & Andrés Rodríguez-Pose, 2015. "Decentralization and the Welfare State: What Do Citizens Perceive?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 120(2), pages 411-435, January.
    4. Asatryan, Zareh & Feld, Lars P., 2015. "Revisiting the link between growth and federalism: A Bayesian model averaging approach," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 772-781.

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