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Explaining Fiscal Decentralization

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  • Leonardo Letelier S.

    (University of Chile)

Abstract

This study uses a panel of sixty-four countries to test empirically various hypotheses about the causes of decentralization at the government level and in different functional spending areas. The empirical results find a negative impact of urbanization on decentralization. In the general case, a higher income per capita favors decentralization, with this effect being stronger for high-income countries. However, the use of functional measurements of decentralization shows that income per capita has a negative effect on health decentralization. Urbanization has a negative impact on the fiscal decentralization of health and education, and it has a positive effect on the share of housing expenditures being made by subnational governments.

Suggested Citation

  • Leonardo Letelier S., 2005. "Explaining Fiscal Decentralization," Public Finance Review, , vol. 33(2), pages 155-183, March.
    • Handle: RePEc:sae:pubfin:v:33:y:2005:i:2:p:155-183
    DOI: 10.1177/1091142104270910
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    References listed on IDEAS

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    Cited by:

    1. Wang, Zhiguo & Ma, Liang, 2012. "New Development of Fiscal Decentralization in China," MPRA Paper 36918, University Library of Munich, Germany.

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