Reexamining the determinants of fiscal decentralization: what is the role of geography?

Gustavo Canavire-Bacarreza, Jorge Martinez-Vazquez () and Bauyrzhan Yedgenov

Journal of Economic Geography, 2017, vol. 17, issue 6, 1209-1249

Abstract: This paper contributes to the existing literature on the determinants of fiscal decentralization by exploring in depth the empirical relevance of physical geography as a determinant of fiscal decentralization; more geographically diverse countries show greater heterogeneity among their citizens. The theoretical framework imbeds geography into the concept of spatial decay in the provision of public services and our empirical estimation employs a panel data set for 94 countries for the period 1970–2010. Following the ‘first nature’ geography literature we construct a geographical fragmentation index based on elevation data and find that geographical fragmentation and area are significantly and positively related to fiscal decentralization. Following the ‘second nature’ geography literature we interact the geographical fragmentation index with time variant infrastructure variables, in order to test the effect that infrastructure and communications have on physical geography and fiscal decentralization. While the development of infrastructure tends to reduce the effect of physical geography on decentralization, this effect is rather small and mostly statistically insignificant.

Keywords: Fiscal decentralization; geography; public infrastructure; H71; H77; R12 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://hdl.handle.net/10.1093/jeg/lbw032 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Reexamining The Determinants Of Fiscal Decentralization: What Is The Role Of Geography? (2012)
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:oup:jecgeo:v:17:y:2017:i:6:p:1209-1249.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Journal of Economic Geography is currently edited by Jorge De la Roca, Stephen Gibbons, Simona Iammarino, Amanda Ross and James Faulconbridge

More articles in Journal of Economic Geography from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().