Who honor the rules of federalism? Party system nationalization and fiscal performance

Santiago Lago-Peñas, Agnese Sacchi and Pablo Simon-Cosano

No 1409, Working Papers. Collection A: Public economics, governance and decentralization from Universidade de Vigo, GEN - Governance and Economics research Network

Abstract: This paper explores the impact of decentralization on countries’ fiscal outcomes paying attention to one aspect usually neglected in the literature: the relevance of self-interested local politics. Relevance that can be proxied by the nationalization of political party systems, namely the extent to which parties compete nationally oriented. Based on a sample of developed and developing countries over the period 1970-2011, our findings are twofold. First, fiscal decentralization has a positive effect on general governments' primary balance. Second, primary balance is negatively affected by the nationalization of party systems only when the latter is extremely weak.

Keywords: Government primary balance; fiscal decentralization; regional authority; party system nationalization. (search for similar items in EconPapers)
JEL-codes: H62 H74 H77 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2014-11
New Economics Papers: this item is included in nep-pbe, nep-pol and nep-ure
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http://infogen.webs.uvigo.es/WP/WP1409.pdf First version, 2014 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:gov:wpaper:1409

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