The Influences of Fiscal Decentralization on Economic Performance: Empirical Evidence from OECD Countries

Fuhmei Wang

Prague Economic Papers, 2018, vol. 2018, issue 5, 606-618

Abstract: Based on OECD country experiences over the period from 1990 to 2015, this research rigorously investigates: (1) how fiscal autonomy effects economic growth; (2) whether there is an optimal level of decentralization; and (3) whether and how other factors influence economic performance in a decentralized economy. We find that revenue decentralization does not affect economic performance. The expenditure decentralization dividend in terms of an enhanced economic growth rate can be achieved only when the initial share of local government expenditure is smaller than the growth-maximizing degree through along with tax collection and trade openness.

Keywords: decentralization dividend; economic growth; OECD country experiences (search for similar items in EconPapers)
JEL-codes: C33 H77 O47 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

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DOI: 10.18267/j.pep.674

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