Decentralization or fiscal autonomy ? What does really matter ? effects on growth and public sector size in European transition countries
This paper examines the importance of fiscal autonomy in the analysis of decentralization. Using new data published by the OECD (2001 and 2002), it reproduces several indicators and proposes new measures of decentralization that take into consideration su-bnational governments'autonomy over their revenues. Two models are reproduced: Davoodi and Zou (1998) on decentralization and economic growth,and Oates (1985), on decentralization and public sector size. Some evidence suggests that fiscal autonomy positively affects economic growth. Also, it seems to affect the size of the state, but evidence on this relation is limited. Despite some statistical weaknesses, there are sufficient indications to argue that sub-national governments'fiscal autonomy should be a major concern when measuring decentralization.
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| Date of creation: | 01 Mar 2004 |
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| Handle: | RePEc:wbk:wbrwps:3254 |
| Contact details of provider: | Postal: Phone: (202) 477-1234 Web page: http://www.worldbank.org/Email: More information through EDIRC
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- Jorge Martinez-Vazquez & Robert McNab, 1997. "Fiscal Decentralization, Economic Growth, and Democratic Governance," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9707, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- Era Dabla-Norris & Paul Wade, 2002. "The Challenge of Fiscal Decentralization in Transition Countries," IMF Working Papers 02/103, International Monetary Fund.
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"Fiscal Decentralization and Economic Growth: A Cross-Country Study,"
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Elsevier, vol. 43(2), pages 244-257, March.
- Hamid Davoodi & Heng-fu Zou, 1996. "Fiscal Decentralization and Economic Growth: A Cross-Country Study," CEMA Working Papers 98, China Economics and Management Academy, Central University of Finance and Economics.
- Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
- Roy Bahl, 1999.
"Implementation Rules For Fiscal Decentralization,"
International Center for Public Policy Working Paper Series, at AYSPS, GSU
paper9901, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- Roy Bahl, 1999. "Implementation Rules For Fiscal Decentralization," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9803, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- Akai, Nobuo & Sakata, Masayo, 2002. "Fiscal decentralization contributes to economic growth: evidence from state-level cross-section data for the United States," Journal of Urban Economics, Elsevier, vol. 52(1), pages 93-108, July.
- Ehdaie, Jaber, 1994. "Fiscal decentralization and the size of the government : an extension with evidence from cross-country data," Policy Research Working Paper Series 1387, The World Bank.
- Jing Jin & Heng-fu Zou, 2000.
"How does fiscal decentralization affect aggregate, national, and subnational government size?,"
CEMA Working Papers
72, China Economics and Management Academy, Central University of Finance and Economics.
- Jin, Jing & Zou, Heng-fu, 2002. "How does fiscal decentralization affect aggregate, national, and subnational government size?," Journal of Urban Economics, Elsevier, vol. 52(2), pages 270-293, September.
- Ebel, Robert D. & Yilmaz, Serdar, 2002. "On the measurement and impact of fiscal decentralization," Policy Research Working Paper Series 2809, The World Bank.
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