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Decentralization and macroeconomic performance

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  • David King
  • Yue Ma

Abstract

The paper examines the relationship between some key measures of macroeconomic performance and fiscal decentralization in OECD countries, and the impact on this relationship of increased policy co-ordination among countries since 1985. It is shown that prior to 1985 there was a significant relationship between decentralization and macroeconomic performance on all of these measures, with decentralized performing better. By 1996, however, the relationships had all ceased to be significant. This suggests that, as a result of harmonization, the tendency for decentralized economies to have more effective economic policies has weakened.

Suggested Citation

  • David King & Yue Ma, 2000. "Decentralization and macroeconomic performance," Applied Economics Letters, Taylor & Francis Journals, vol. 7(1), pages 11-14.
  • Handle: RePEc:taf:apeclt:v:7:y:2000:i:1:p:11-14
    DOI: 10.1080/135048500352013
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    Cited by:

    1. Lundin, Martin & Skedinger, Per, 2006. "Decentralisation of active labour market policy: The case of Swedish local employment service committees," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 775-798, May.
    2. Luca Gandullia, 2012. "The role of direct taxes in fiscal decentralization," DEP - series of economic working papers 6/2012, University of Genoa, Research Doctorate in Public Economics.
    3. Tang, Hsiao Chink & Liu, Philip & Cheung, Eddie C., 2013. "Changing impact of fiscal policy on selected ASEAN countries," Journal of Asian Economics, Elsevier, vol. 24(C), pages 103-116.
    4. Makreshanska, Suzana & Petrevski, Goran, 2015. "Fiscal Decentralization and Inflation in Central and Eastern Europe," MPRA Paper 77596, University Library of Munich, Germany, revised 16 Mar 2017.

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