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Fiscal Decentralization and Government Size: An International Test for Leviathan Accounting for Unmeasured Economic Activity

John Edwin Anderson () and Hendrik van den Berg

International Tax and Public Finance, 1998, vol. 5, issue 2, pages 171-186

Abstract: Tests for the presence of Leviathan, evidenced by a positive relationship between the size of government measured as a percentage of GDP, and the degree of fiscal centralization, have provided mixed results. We derive alternative measures of the size of government taking into account household and informal market activity. Traditional Leviathan models are then re-estimated for an international sample of forty-five countries. Controlling for income, population, intergovernmental grants, and urbanization we test whether fiscal centralization is responsible for the relative size of government. We find no evidence of a relationship between fiscal centralization and government size. Copyright Kluwer Academic Publishers 1998

Keywords: Leviathan; fiscal centralization; size of government; unmeasured economic activity (search for similar items in EconPapers)
Date: 1998
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