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The Fiscal Manipulation of a Decentralized Public Sector: Macroeconomic Policy in Denmark

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  • Jens Blom-Hansen
  • Thomas Pallesen

Abstract

The authors challenge the conventional wisdom according to which a decentralized public sector makes it difficult to instrumentalize the public budget for macroeconomic control purposes. Although the literature has already demonstrated that the statistical relationship between decentralization and macroeconomic performance is not as straightforward as is indicated by the conventional wisdom, and that decentralization actually seems to be positively correlated with macroeconomic performance, a gap exists in the literature as to the causal relationship, that is, the exact mechanisms by which decentralization impacts on performance. The authors begin to fill that gap by investigating the workings of one decentralized public budget, namely that of Denmark.

Suggested Citation

  • Jens Blom-Hansen & Thomas Pallesen, 2001. "The Fiscal Manipulation of a Decentralized Public Sector: Macroeconomic Policy in Denmark," Environment and Planning C, , vol. 19(4), pages 607-623, August.
    • Handle: RePEc:sae:envirc:v:19:y:2001:i:4:p:607-623
    DOI: 10.1068/c0037
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    References listed on IDEAS

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    1. Snyder, Wayne W., 1973. "Are the budgets of state and local governments destabilizing? A six country comparison," European Economic Review, Elsevier, vol. 4(2), pages 197-213, June.
    2. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922, October.
    3. Christensen, Jørgen Grønnegård, 1982. "Growth by Exception: or The Vain Attempt to Impose Resource Scarcity on the Danish Public Sector," Journal of Public Policy, Cambridge University Press, vol. 2(2), pages 117-144, May.
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