Fiscal Decentralization and Economic Growth
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Authors
Martinez-Vazquez, Jorge
McNab, Robert M.
Subjects
Fiscal Decentralization
Economic Growth
Economic Growth
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Date of Issue
2001-01
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Abstract
This paper reviews the current knowledge on an issue of increasing policy interest: what impact fiscal decentralization has on economic growth. Fiscal decentralization may indeed have a direct impact on economic growth but the theoretical underpinnings for this relationship remain largely underdeveloped. The absence of an adequate theoretical framework has undermined the validity of the empirical work on this subject. A fair summary of the empirical search for a direct relationship between fiscal decentralization and economic growth is that it remains an open question. Much less attention has been devoted in the literature to the indirect channels through which fiscal decentralization may affect economic growth, through the impact of fiscal decentralization on economic efficiency, the regional distribution of resources, and macroeconomic stability. This paper explores the nature of these links and concludes with some thoughts and policy advice.
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Article
Description
International Studies Program, Working Paper #01-1, SSRN-id259281
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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.