Decentralization or Fiscal Autonomy? What Does Really Matter? Effects on Growth and Public Sector Size in European Transition Countries
This paper examines the importance of fiscal autonomy in the analysis of decentralization. Using new data published by the OECD (2001 and 2002), it reproduces several indicators and proposes new measures of decentralization that take into considera...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/03/3171516/decentralization-or-fiscal-autonomy-really-matter-effects-growth-public-sector-size-european-transition-countries http://hdl.handle.net/10986/15619 |
| Summary: | This paper examines the importance of
fiscal autonomy in the analysis of decentralization. Using
new data published by the OECD (2001 and 2002), it
reproduces several indicators and proposes new measures of
decentralization that take into consideration su-bnational
governments' autonomy over their revenues. Two models
are reproduced: Davoodi and Zou (1998) on decentralization
and economic growth, and Oates (1985), on decentralization
and public sector size. Some evidence suggests that fiscal
autonomy positively affects economic growth. Also, it seems
to affect the size of the state, but evidence on this
relation is limited. Despite some statistical weaknesses,
there are sufficient indications to argue that sub-national
governments' fiscal autonomy should be a major concern
when measuring decentralization. |
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