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Fiscal Federalism and Long-Run Macroeconomic Performance

Author

Listed:
  • Lars P. Feld

    () (Ruprecht-Karls-Universitat Heidelberg, Alfred Weber Institute for Economics)

  • Jan Schnellenbach

    () (Ruprecht-Karls-Universitat Heidelberg, Alfred Weber Institute for Economics)

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, 2010. "Fiscal Federalism and Long-Run Macroeconomic Performance," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1009, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  • Handle: RePEc:ays:ispwps:paper1009
    as

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    File URL: http://icepp.gsu.edu/files/2015/03/ispwp1009.pdf
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    References listed on IDEAS

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    8. Shang-Jin Wei, 2000. "Local Corruption and Global Capital Flows," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(2), pages 303-354.
    9. Buettner, Thiess & Overesch, Michael & Schreiber, Ulrich & Wamser, Georg, 2009. "Taxation and capital structure choice--Evidence from a panel of German multinationals," Economics Letters, Elsevier, vol. 105(3), pages 309-311, December.
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    Citations

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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.
    2. Diaz-Serrano, Luis & Rodriguez-Pose, Andres, 2011. "Decentralization, Happiness, and the Perception of Institutions," CEPR Discussion Papers 8356, C.E.P.R. Discussion Papers.
    3. 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.
    4. Ibrahim Ahmed Elbadawi & Raimundo Soto, 2013. "Fiscal Regimes In And Outside The Mena Region," Middle East Development Journal (MEDJ), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 1-25.
    5. Auci, Sabrina & Castelli, Annalisa & Vignani, Donatella, 2011. "Local or national environmental spending in Italy: a stochastic frontier analysis," MPRA Paper 58621, University Library of Munich, Germany.
    6. Libman, Alexander, 2010. "Constitutions, regulations, and taxes: Contradictions of different aspects of decentralization," Journal of Comparative Economics, Elsevier, vol. 38(4), pages 395-418, December.
    7. Achim Truger & Dieter Vesper, 2014. "Zur Reform des Länderfinanzausgleichs ? eine Notwendigkeit?," IMK Studies 37-2014, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.

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    Keywords

    fiscal federalism; scal decentralization; growth; economic performances;

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