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Can Fiscal Decentralization Strengthen Social Capital?

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  • Luiz R. De Mello Jr.

Abstract

Countries that are rich in social capital, defined as the social and political institutions that stimulate interpersonal trust, civic cooperation, and social cohesiveness, tend to have more efficient governments, have better governance systems, and grow faster. This article provides preliminary cross-country evidence for a sample of developing and developed countries that fiscal decentralization—the assignment of expenditure functions and revenue sources to lower levels of government—can boost social capital.

Suggested Citation

  • Luiz R. De Mello Jr., 2004. "Can Fiscal Decentralization Strengthen Social Capital?," Public Finance Review, , vol. 32(1), pages 4-35, January.
    • Handle: RePEc:sae:pubfin:v:32:y:2004:i:1:p:4-35
    DOI: 10.1177/1091142103260699
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    2. Sung Hoon Kang & Mark Skidmore, 2018. "The Effects of Natural Disasters on Social Trust: Evidence from South Korea," Sustainability, MDPI, vol. 10(9), pages 1-16, August.
    3. Alessandra Cepparulo & Luisa Giuriato, 2022. "The residential healthcare for the elderly in Italy: some considerations for post-COVID-19 policies," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(4), pages 671-685, June.
    4. Ronald MacDonald & Paul Hallwood, 2004. "The Economic Case for Fiscal Federalism in Scotland," Working papers 2004-42, University of Connecticut, Department of Economics.
    5. Iqbal, Nasir & Nawaz, Saima, 2010. "Fiscal Decentralization and Macroeconomic Stability: Theory and Evidence from Pakistan," MPRA Paper 27184, University Library of Munich, Germany.
    6. Zhiguo Wang & Liang Ma, 2014. "Fiscal Decentralization in China: A Literature Review," Annals of Economics and Finance, Society for AEF, vol. 15(1), pages 51-65, May.
    7. Christoph A. Schaltegger & Benno Torgler, 2005. "Trust and Fiscal Performance: A Panel Analysis with Swiss Data," CREMA Working Paper Series 2005-05, Center for Research in Economics, Management and the Arts (CREMA).
    8. Busemeyer, Marius R., 2007. "The Impact of Fiscal Decentralisation on Education and Other Types of Spending," MPIfG Discussion Paper 07/8, Max Planck Institute for the Study of Societies.
    9. Luiz de Mello & João Tovar Jalles, 2022. "Decentralisation and the environment: Survey-based and cross-country evidence," Working Papers REM 2022/0215, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    10. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
    11. Jørn Rattsø & Jon Hernes Fiva, 2005. "Decentralization with Property Taxation to Improve Incentives: Evidence from Local Governments’ Discrete Choice," Working Paper Series 5305, Department of Economics, Norwegian University of Science and Technology, revised 02 Sep 2005.
    12. Lim, Taekyoung & Tang, Tian & Bowen, William M., 2021. "The Impact of Intergovernmental Grants on Innovation in Clean Energy and Energy Conservation: Evidence from the American Recovery and Reinvestment Act," Energy Policy, Elsevier, vol. 148(PA).
    13. Fabio Sabatini, 2007. "Mapping Italy’s social capital," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.
    14. Bilin Neyapti & Zeynep Burcu Bulut-Cevik, 2011. "Fiscal Decentralization, Redistribution and Growth," Koç University-TUSIAD Economic Research Forum Working Papers 1114, Koc University-TUSIAD Economic Research Forum.
    15. Faguet, Jean-Paul, 2014. "Decentralization and Governance," World Development, Elsevier, vol. 53(C), pages 2-13.
    16. Trien NGUYEN & Randall M. WIGLE, 2009. "The Skill Dimension of Labour Market Impacts of External Price Shocks: Numerical Calculations From a Canadian Regional Trade Model," EcoMod2009 21500071, EcoMod.
    17. Neyapti, Bilin, 2004. "Fiscal decentralization, central bank independence and inflation: a panel investigation," Economics Letters, Elsevier, vol. 82(2), pages 227-230, February.
    18. de Mello, Luiz & Sab, Randa, 2002. "Government spending, rights, and civil liberties," International Review of Law and Economics, Elsevier, vol. 22(3), pages 257-276, September.
    19. Neyapti, Bilin, 2010. "Fiscal decentralization and deficits: International evidence," European Journal of Political Economy, Elsevier, vol. 26(2), pages 155-166, June.
    20. Schaltegger, Christoph A. & Torgler, Benno, 2007. "Government accountability and fiscal discipline: A panel analysis using Swiss data," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 117-140, February.
    21. Muhammad Abdul Ghofur & Lucky Rachmawati, 2019. "The Impact Of Fiscal Decentralization On Income And Education Inequality Through Economic Growth In East Java," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 4(Special), pages 90-98, May.
    22. Oguzhan Dincer, 2010. "Fiscal Decentralization and Trust," Public Finance Review, , vol. 38(2), pages 178-192, March.

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