Does decentralization contribute to efficiency? Evidence from OECD countries

Yolanda Ubago Martínez, Pedro Pascual Arzoz and Belen Iraizoz

Applied Economics, 2018, vol. 50, issue 7, 726-742

Abstract: This article provides evidence on the relationship between fiscal decentralization and technical efficiency. We begin the first stage of this study with a data envelopment analysis to obtain technical efficiency estimates for a sample of 23 OECD countries over the period 1992–2009. In a second stage, we explore the effects of fiscal decentralization and other control variables on technical efficiency. The results including all the control variables reveal a statistically significant negative relationship between fiscal decentralization of public expenditure and technical efficiency.

Date: 2018
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DOI: 10.1080/00036846.2017.1340572

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