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Fiscal decentralization and the distributive incidence of the Great Recession

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  • Pablo Beramendi
  • Melissa Rogers

Abstract

This paper argues that fiscal decentralization is one important explanation for variation in distributive outcomes following the Great Recession. Using a difference-in-differences approach, it examines how fiscal decentralization mediated the link between spatial distribution, redistributive effort and interpersonal inequality in 21 Organisation for Economic Co-operation and Development (OECD) countries in the years following the Great Recession. It is found that fiscally decentralized nations saw increased interpersonal inequality and lower redistribution, but lower interregional inequality. These results are attributed here to the weaker redistributive mechanisms in fiscally decentralized nations, which increased interpersonal inequality while preserving market-driven declines in high productivity areas that temporary increased regional convergence.

Suggested Citation

  • Pablo Beramendi & Melissa Rogers, 2020. "Fiscal decentralization and the distributive incidence of the Great Recession," Regional Studies, Taylor & Francis Journals, vol. 54(7), pages 881-896, July.
    • Handle: RePEc:taf:regstd:v:54:y:2020:i:7:p:881-896
    DOI: 10.1080/00343404.2019.1652895
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    Cited by:

    1. Timothy J. Goodspeed, 2022. "Coping with extreme events: On solving decentralized budgetary crises," Working Papers. Collection A: Public economics, governance and decentralization 2210, Universidade de Vigo, GEN - Governance and Economics research Network.
    2. Francesc Amat & Toni Rodon, 2021. "Institutional Commitment Problems and Regional Autonomy: The Catalan Case," Politics and Governance, Cogitatio Press, vol. 9(4), pages 439-452.

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