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Public Sector Decentralization: Measurement Concepts and Recent International Trends

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  • Stegarescu, Dan

Abstract

This paper deals with the problems encountered in defining and measuring the degree of fiscal decentralization. Drawing on a recent analytical framework of the OECD, different measures of fiscal autonomy and revenue decentralization are presented which consider tax-raising powers of sub-central governments. Taking account of changes in the assignment of decision-making competencies in the course of time, new time series of annual data on the degree of fiscal decentralization are provided for 23 OECD countries in the time period between 1965 and 2001. It is shown that common measures usually employed tend to considerably overestimate the extent of fiscal decentralization. Evidence is also provided for increasing fiscal decentralization in a majority of OECD countries during the last three decades.

Suggested Citation

  • Stegarescu, Dan, 2004. "Public Sector Decentralization: Measurement Concepts and Recent International Trends," ZEW Discussion Papers 04-74, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:2361
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    1. G. Gulsun Arikan, 2004. "Fiscal Decentralization: A Remedy for Corruption?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 11(2), pages 175-195, March.
    2. Oates, Wallace E, 1985. "Searching for Leviathan: An Empirical Study," American Economic Review, American Economic Association, vol. 75(4), pages 748-757, September.
    3. Lars P. Feld & Gebhard Kirchgaessner & Christoph A. Schaltegger, 2010. "Decentralized Taxation and the Size of Government: Evidence from Swiss State and Local Governments," Southern Economic Journal, Southern Economic Association, vol. 77(1), pages 27-48, July.
    4. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March.
    5. Majone, Giandomenico, 1997. "From the Positive to the Regulatory State: Causes and Consequences of Changes in the Mode of Governance," Journal of Public Policy, Cambridge University Press, vol. 17(02), pages 139-167, May.
    6. Stegarescu, Dan & Büttner, Thiess & Behnisch, Alexej, 2002. "Public Sector Centralization and Productivity Growth: Reviewing the German Experience," ZEW Discussion Papers 02-03, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    7. 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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    Cited by:

    1. Belke, Ansgar H. & Baumgärtner, Frank & Schneider, Friedrich & Setzer, Ralph, 2005. "The Different Extent of Privatisation Proceeds in EU Countries: A Preliminary Explanation Using a Public Choice Approach," IZA Discussion Papers 1741, Institute for the Study of Labor (IZA).
    2. Sylvie Charlot & Sonia Paty & Michel Visalli, 2013. "Assessing the impact of local taxation on property prices: a spatial matching contribution," Applied Economics, Taylor & Francis Journals, vol. 45(9), pages 1151-1166, March.
    3. Aldasoro, Iñaki & Seiferling, Mike, 2014. "Vertical fiscal imbalances and the accumulation of government debt," SAFE Working Paper Series 61, Research Center SAFE - Sustainable Architecture for Finance in Europe, Goethe University Frankfurt.
    4. Jorge Martínez Vázquez & Robert M. McNab, 2006. "Fiscal decentralization, macrostability and growth," Hacienda Pública Española, IEF, vol. 179(4), pages 25-49, September.
    5. Verônica Orellano & Fabiana Rocha & Enlinson Mattos & Ana Carolina Zoghbi, 2012. "Descentralização Fiscal e Municipalização do Ensino Fundamental: Impactos sobre os Indicadores de Desempenho Educacional," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 13(3a), pages 529-552.
    6. Iftikhar Ahmad, 2016. "Assessing the Effects of Fiscal Decentralization on the Education Sector: A Cross-Country Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(2), pages 53-96, July-Dec.
    7. Christian Leßmann, 2006. "Fiscal Decentralization and Regional Disparity: A Panel Data Approach for OECD Countries," ifo Working Paper Series 25, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    8. Aurélie Cassette & Sonia Paty, 2010. "Fiscal decentralization and the size of government: a European country empirical analysis," Public Choice, Springer, vol. 143(1), pages 173-189, April.
    9. David Bartolini & Agnese Sacchi & Simone Salotti & Raffaella Santolini, 2015. "Fiscal decentralisation in times of financial crises," Working Papers. Collection A: Public economics, governance and decentralization 1506, Universidade de Vigo, GEN - Governance and Economics research Network.
    10. Verônica Orellano & Fabiana Rocha & Enlinson Mattos & Ana Carolina Zoghbi, 2012. "Descentralização Fiscal e Municipalização do Ensino Fundamental: Impactos sobre os Indicadores de Desempenho Educacional," Economia, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 13(3a), pages 529-552.
    11. Ulrike Stierle-von Schütz, 2005. "Fiscal Design and the Location of Economic Activity," ERSA conference papers ersa05p539, European Regional Science Association.
    12. Heinemann, Friedrich, 2006. "The Drivers of Deregulation in the Era of Globalization," ZEW Discussion Papers 06-012, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    13. Stegarescu, Dan, 2005. "Centralizing Tendencies in the Public Sector in Germany," ZEW Discussion Papers 05-46, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    14. Agnieszka Kopańska, 2016. "Partial decentralization and its influence on local governments’ spending policy. An analysis of spending for teachers and other resources needed for schools," Working Papers 2016-38, Faculty of Economic Sciences, University of Warsaw.
    15. Blankart Charles B. & Koester Gerrit B., 2007. "Theoretischer und empirischer wissenschaftlicher Fortschritt / Theoretical and empirical scientific progress: Eine kritische Analyse des Buches von Alesina und Spolaore: „The Size of Nations“ / A crit," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 58(1), pages 167-180, January.
    16. Bartolini, David & Ninka, Eniel & Santolini, Raffaella, 2017. "Tax Decentralisation, Labour productivity and Employment," MPRA Paper 81070, University Library of Munich, Germany.
    17. repec:eee:rujoec:v:1:y:2015:i:4:p:404-418 is not listed on IDEAS

    More about this item

    Keywords

    Fiscal Decentralization; Measurement of Decentralization; Sub-national Autonomy; Tax Autonomy;

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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