IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Fiscal Decentralization and Borrowing Costs: The Case of Local Governments

  • Luiz R. De Mello Jr.

    (Catholic University of Brasília, Brazil, ldemello@imf.org)

Borrowing costs vary across different levels of government. Local governments often face costlier borrowing than their higher level counterparts. This article shows that the decentralization of expenditure functions and revenue sources to lower tiers of government has a bearing on local government borrowing costs. Empirical evidence is provided for a sample of industrial and developing economies in the period 1970 to 1995, using three different fiscal decentralization indicators and two different borrowing cost indices. The findings are robust to the inclusion of controls for additional determinants of subnational borrowing costs. An important implication of these results is that policies aimed at disciplining subnational finances in the process of fiscal decentralization also tend to reduce subnational borrowing costs.

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.

File URL: http://pfr.sagepub.com/content/29/2/108.abstract
Download Restriction: no

Article provided by in its journal Public Finance Review.

Volume (Year): 29 (2001)
Issue (Month): 2 (March)
Pages: 108-138

as
in new window

Handle: RePEc:sae:pubfin:v:29:y:2001:i:2:p:108-138
Contact details of provider:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:29:y:2001:i:2:p:108-138. 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: (SAGE Publications)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.