FISCAL DECENTRALIZATION DETERMINANTS AND LOCAL ECONOMIC DEVELOPMENT IN EU COUNTRIES

Anca Florentina Gavriluţă and Florin Oprea ()
Additional contact information
Anca Florentina Gavriluţă: Alexandru Ioan Cuza University of Iaşi Iași, România
Florin Oprea: Alexandru Ioan Cuza University of Iaşi Iași, România

EURINT, 2017, vol. 4, 180-197

Abstract: This work aims to assess the impact of fiscal decentralization on local (regional) development in the EU Member States while controlling for macroeconomic and local autonomy specific factors. Using a panel data approach with dynamic effects, we examined the implications of fiscal decentralization on local development across European Union countries over the 1990-2004 period. The novelty of the study is emphasized by including in the analysis a variable which tests local fiscal discipline, more exactly, Fiscal Rule Strength Index for local level of government. Our findings suggest that prosperity of regions, measured in GDP growth depends on variables such as characteristics of decentralization undertaken by each country or local fiscal discipline, confirming our primary hypothesis. This supports the view that recently implemented reforms aiming to enforce fiscal discipline following-up the Fiscal Compact strengthened the local budgetary framework and restrained, therefore, the local discretionary power to act towards development.

Keywords: fiscal decentralization; economic growth; local fiscal discipline. (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://cse.uaic.ro/eurint/proceedings/index_htm_files/EURINT2017_GAV.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jes:eurint:y:2017:v:4:p:180-197

Access Statistics for this article

More articles in EURINT from Centre for European Studies, Alexandru Ioan Cuza University Contact information at EDIRC.
Bibliographic data for series maintained by Alupului Ciprian ().