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Fiscal Federalism and Long-Run Macroeconomic Performance: A Survey of Recent Research

Lars Feld and Jan Schnellenbach

Environment and Planning C, 2011, vol. 29, issue 2, 224-243

Abstract: In this paper we offer both a broad survey of the literature on fiscal federalism and long-run economic performance, and a detailed report of some of our own recent studies in this field. We look at the difference between study types (cross-country versus single-country studies), and at the relevance of the broader institutional framework into which fiscal decentralization is embedded. We also look into structural change and intergovernmental transfers as a detailed mechanism through which federalism may have an impact on aggregate economic performance. It turns out that fiscal decentralization has no robust effect on growth, but the evidence hints at a positive effect on overall productivity, conditional on the broader institutional framework.

Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envirc:v:29:y:2011:i:2:p:224-243

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