The relationship between decentralization and economic growth across regimes

Henry Aray () and Luis Pedauga

The Annals of Regional Science, 2024, vol. 72, issue 1, No 1, 25 pages

Abstract: Abstract Panel smooth transition regression (PSTR) is applied to obtain thresholds in certain variables to classify the regions into regimes (high or low). Data for the regions of Spain over the period 1986–2010 are used. In general, the results point to a positive (negative) relationship between fiscal (administrative) decentralization and economic growth in regions with low public infrastructure stock per efficient worker and high human capital per worker. In addition, in regions with low (high) total factor productivity, expenditure (revenue) decentralization is positively (negatively) correlated with economic growth. The results are fairly robust to different specifications and estimation methods.

JEL-codes: C33 H77 R11 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s00168-022-01187-x

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