Fiscal Decentralization and the Functional Composition of Public Expenditures
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Authors
Arze del Granado, F. Javier
Martinez-Vázquez, Jorge
McNab, Robert
Subjects
Fiscal Decentralization
Functional Composition
Pure Public Goods
Publicly Provided Private Goods
Education
Health
Functional Composition
Pure Public Goods
Publicly Provided Private Goods
Education
Health
Advisors
Date of Issue
2005-09
Date
Publisher
Georgia State University
Language
Abstract
We examine the relationship between fiscal decentralization and the functional composition of public expenditures. Using a distance-sensitive representative agent model, we hypothesize that higher levels of fiscal decentralization induce agents to demand increased production of publicly provided private goods. We test this hypothesis using an unbalanced panel data set of 45 developed and developing countries covering a 28-year period. We find strong evidence that decentralization increases the share of education and health expenditures in total government expenditures. We note that the influence of decentralization on the composition of public expenditures may be greater in developing countries relative to industrialized countries.
Type
Paper
Description
Series/Report No
Department
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NPS Report Number
Sponsors
Funder
Format
32 p.
Citation
Arze de Granado, F.J., Jorge Martinez-Vazquez, and Robert McNab. "Fiscal decentralization and the functional composition of public expenditures". International Studies Program Working Paper 05-01(September 2005).
Distribution Statement
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.