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Fiscal decentralization and economic growth in selected European countries

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  • Neringa Slavinskaitė

Abstract

The paper analyses the fiscal decentralization effects on economic growth in unitary countries of European Union for the period 2005–2014. The empirical analysis was based on the multiple regression method. The fixed effect panel model was used as framework for the analysis. In order to examine the different impact of fiscal decentralization, the same analysis was applied to subsets of countries categorized into two groups according to countries’ level of economic development. This further analysis found that there is positive relationship between fiscal decentralization and economic growth in low level of economically developing countries and no relationship in high level of economically developed countries. These results suggested that fiscal decentralization is not always instrument for promotion of economic growth, which means that country’s economic development level is an important factor when introducing reform of fiscal decentralization. The originality of this article – new fiscal decentralization index and evaluated fiscal decentralization level influence for countries economic growth.

Suggested Citation

  • Neringa Slavinskaitė, 2017. "Fiscal decentralization and economic growth in selected European countries," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 18(4), pages 745-757, July.
    • Handle: RePEc:taf:jbemgt:v:18:y:2017:i:4:p:745-757
    DOI: 10.3846/16111699.2017.1292312
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    File URL: http://hdl.handle.net/10.3846/16111699.2017.1292312
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    Cited by:

    1. Mihaela Onofrei & Lenuta Cojocariu & Florin Oprea, 2021. "Interconnections between local finances and regional development: a study case of Romania," Journal of Financial Studies, Institute of Financial Studies, vol. 10(6), pages 9-32, May.
    2. Carlos Enrique González Taranco, 2023. "Análisis del impacto macroeconómico de la Descentralización Fiscal en el Crecimiento Económico del Perú, período 2004-2023," Revista de Análisis Económico y Financiero, Universidad de San Martín de Porres, vol. 6(02), pages 26-36.
    3. Ali Adan Hassan, 2022. "Fiscal Decentralization and Economic Growth. The Case of Mogadishu, Somalia," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(8), pages 273-280, August.
    4. Mihaela Onofrei & Ionel Bostan & Elena Cigu & Anca Florentina Vatamanu, 2023. "Ensuring Budgetary Resources at the Level of Local Communities in the Current Social-Economic Context: Evidence for Romanian Municipalities," Economies, MDPI, vol. 11(1), pages 1-16, January.
    5. Zhao, Desen & Dou, Yao & Tong, Lu, 2022. "Effect of fiscal decentralization and dual environmental regulation on green poverty reduction: The case of China," Resources Policy, Elsevier, vol. 79(C).
    6. Omodero Cordelia Onyinyechi, 2022. "Fiscal Federalism, Tax Independence and Social Enhancement," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 32(4), pages 1-15, December.

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