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Decentralization and economic growth: Evidence across states of some relevant macroeconomic variables

Author

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  • Henry Aray

    (Department of Economic Theory and Economic History, University of Granada.)

  • Luis Pedagua

    (University of Leon)

Abstract

The objective of this paper is to test the relationship between de- centralization and economic growth across states. A novel methodol- ogy is applied that allows obtaining thresholds in certain variables to classify the regions into regimes (high or low). Data for the regions of Spain over the period 1986-2010 are used. In general, the results point to a positive relationship between fiscal decentralization and economic growth in regions with low public infrastructure stock per efficient worker, high human capital per worker and low total factor produc- tivity (TFP). In addition, in regions with low public infrastructure stock per efficient worker and high human capital, a negative relation- ship between administrative decentralization and economic growth is found.

Suggested Citation

  • Henry Aray & Luis Pedagua, 2021. "Decentralization and economic growth: Evidence across states of some relevant macroeconomic variables," ThE Papers 21/08, Department of Economic Theory and Economic History of the University of Granada..
    • Handle: RePEc:gra:wpaper:21/08
    as

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    File URL: http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers21_08.pdf
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    Keywords

    TFP; Spain; Panel Data.;
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