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Fiscal descentralization and the quality of government: evidence from panel data

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  • Andreas Kyriacou

    (Universidad de Girona)

  • Oriol Roca sagalés

    (Universidad Autónoma de Barcelona)

Abstract

In this paper we focus on the relationship between fiscal decentralization and government quality. In a sample of 29 developing and developed countries over the period 1984-1997, fiscal decentralization has a positive effect on institutional quality but this effect diminishes as countries become wealthier. Moreover, the positive effect of fiscal decentralization on government quality is reduced by electoral and decision-making decentralization in poor and medium income countries whereas these forms of decentralization seem to improve the impact of fiscal decentralization on government quality in rich countries.

Suggested Citation

  • Andreas Kyriacou & Oriol Roca sagalés, 2009. "Fiscal descentralization and the quality of government: evidence from panel data," Hacienda Pública Española / Review of Public Economics, IEF, vol. 189(2), pages 131-155, June.
    • Handle: RePEc:hpe:journl:y:2009:v:189:i:2:p:131-155
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    Cited by:

    1. Suzana Makreshanska-Mladenovska & Goran Petrevski, 2019. "Fiscal Decentralisation and Government Size: Evidence from a Panel of European Countries," Hacienda Pública Española / Review of Public Economics, IEF, vol. 229(2), pages 33-58, June.
    2. Neyapti, Bilin, 2013. "Fiscal decentralization, fiscal rules and fiscal discipline," Economics Letters, Elsevier, vol. 121(3), pages 528-532.
    3. Furceri, Davide & Sacchi, Agnese & Salotti, Simone, 2014. "Can fiscal decentralization alleviate government consumption volatility?," MPRA Paper 54513, University Library of Munich, Germany.
    4. Michele Cincera & Antonio Estache & Wolf Alexander, 2012. "Would Less Fiscal Decentralization Reduce Public Sector Size across Sectors in Europe ?," Working Papers ECARES ECARES 2012-028, ULB -- Universite Libre de Bruxelles.
    5. Serhan Cevik, 2017. "Size matters: fragmentation and vertical fiscal imbalances in Moldova," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(2), pages 367-381, May.
    6. Neyapti, Bilin, 2010. "Fiscal decentralization and deficits: International evidence," European Journal of Political Economy, Elsevier, vol. 26(2), pages 155-166, June.
    7. Losina PURNASTUTI & Bambang SUPRAYITNO & SUGIHARSONO, 2016. "Does Human Capital Investment Matter For Growth? Evidence From Indonesia During The Fiscal Decentralization Era," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 39-49, June.
    8. Sacchi, Agnese & Salotti, Simone, 2014. "The asymmetric nature of fiscal decentralization: theory and practice," MPRA Paper 54506, University Library of Munich, Germany.
    9. Josip Viskovic & Pasko Burnac & Maja Herman, 2021. "Impact Of Political And Fiscal Decentralization On The Government Quality In Central And Eastern European Countries," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 30(1), pages 285-302, june.
    10. Mr. Serhan Cevik, 2014. "Fragmentation and Vertical Fiscal Imbalances Lessons from Moldova," IMF Working Papers 2014/233, International Monetary Fund.

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    More about this item

    Keywords

    Quality of government; fiscal decentralization; political decentralization; panel data;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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