Economics at your fingertips  

Fiscal decentralisation and the size of government: a review of the empirical literature

Silvia Golem

Financial Theory and Practice, 2010, vol. 34, issue 1, 53-69

Abstract: Within the public choice framework, it has been argued that decentralised authority over the provision and financing of certain public goods and services induces competitive pressure among different governmental units and consequently reduces the size of government. However, in many countries, fiscal decentralisation seems to have occurred almost exclusively through devolution of expenditure activities, without the accompanying devolution of the tax authority. We address this issue in detail, and discuss the repercussions of the resulting vertical fiscal imbalance on the total size of government. We also discuss alternative, demand-side channels of the influence of fiscal decentralisation on the size of government. In the empirical literature that we review, little consensus on the relationship between fiscal decentralisation and the size of government is reached.

Keywords: the size of government; fiscal decentralisation; intergovernmental grants; sub-national expenditures; sub-national own-source revenues (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17) Track citations by RSS feed

Downloads: (external link) (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:

Access Statistics for this article

More articles in Financial Theory and Practice from Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Martina Fabris ().

Page updated 2023-05-18
Handle: RePEc:ipf:finteo:v:34:y:2010:i:1:p:53-69