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Do Fiscal Decentralization and Government Fragmentation Affect Corruption In Different Ways? Evidence from a Panel Data Analysis

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  • Nadia Fiorino

    (Dipartimento di Sistemi e Istituzioni per l’Economia, Università de l’Aquila)

  • Emma Galli

    (Dipartimento di Scienze Sociali, Università di Roma “La Sapienza”)

  • Fabio Padovano

    () (CREM-CNRS, Université de Rennes 1 and DIPES, Università Roma Tre)

Abstract

Are countries characterized by more decentralized fiscal and spending powers less corrupt? Or is a higher degree of government fragmentation a more effective way to deter corruption? Is there any evidence that these alternative ways to enhance government accountability reinforce each other? This paper tries to answer these questions by using several indicators of government fragmentation and fiscal decentralization for a panel of 23 countries in the 1995-2007 time interval. Taken separately, while various measures of government fragmentation do not seem to affect corruption in any significant way, fiscal decentralization measured as fiscal and spending autonomy does seem to reduce corruption. This latter effect is reinforced if fiscal decentralization is combined with a high degree of government fragmentation at the local level. The results appear robust to different specifications of the empirical model.

Suggested Citation

  • Nadia Fiorino & Emma Galli & Fabio Padovano, 2012. "Do Fiscal Decentralization and Government Fragmentation Affect Corruption In Different Ways? Evidence from a Panel Data Analysis," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1217, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  • Handle: RePEc:ays:ispwps:paper1217
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    File URL: http://icepp.gsu.edu/files/2015/03/ispwp1217.pdf
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    Cited by:

    1. Oto-Peralías, Daniel & Romero-Ávila, Diego & Usabiaga, Carlos, 2013. "Does fiscal decentralization mitigate the adverse effects of corruption on public deficits?," European Journal of Political Economy, Elsevier, vol. 32(C), pages 205-231.
    2. Maria Rosaria Alfano & Anna Laura Baraldi & Claudia Cantabene, 2014. "The Effect of the Decentralization Degree on Corruption: A New Interpretation," Working papers 4, Società Italiana di Economia Pubblica.

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    Keywords

    decentralization; common pool; fiscal autonomy; government fragmentation; corruption;

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