Fiscal Decentralization, Economic Freedom, and Political and Civil Liberties in the Americas

Antonio Bojanic

No 1609, Working Papers from Tulane University, Department of Economics

Abstract: This paper analyzes the impact of fiscal decentralization on economic freedom and political and civil liberties in the Americas. Regarding the latter and with the full sample of countries, the findings suggest that decentralization initially worsens but eventually improves political and civil liberties, underlining the importance of fiscal decentralization as a driver for achieving basic liberties. When Canada and the US are excluded, the evidence shows that decentralization may eventually be a detriment for political and civil liberties. With respect to the impact of fiscal decentralization on economic freedom, decentralization first hinders but eventually increases freedom when all countries are included, emphasizing the point that a decentralization regime takes time to develop and function properly. When Canada and the US are excluded, decentralization initially increases but ultimately hampers freedom, demonstrating that if the decentralization regime does not address important matters like fiscal discipline, wealth inequality, and political accountability, economic freedom - like political and civil liberties - will also deteriorate.

Keywords: Fiscal decentralization; economic freedom; political and civil liberties. (search for similar items in EconPapers)
JEL-codes: E62 H70 O23 P52 (search for similar items in EconPapers)
Date: 2016-08
New Economics Papers: this item is included in nep-mac, nep-pbe and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:tul:wpaper:1609

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