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Do Fiscal Decentralization and Government Fragmentation Affect Corruption In Different Ways? Evidence from a Panel Data Analysis

Nadia Fiorino, Emma Galli () and Fabio Padovano ()
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Nadia Fiorino: Dipartimento di Sistemi e Istituzioni per l’Economia, Università de l’Aquila

International Center for Public Policy Working Paper Series, at AYSPS, GSU from International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University

Abstract: Are countries characterized by more decentralized fiscal and spending powers less corrupt? Or is a higher degree of government fragmentation a more effective way to deter corruption? Is there any evidence that these alternative ways to enhance government accountability reinforce each other? This paper tries to answer these questions by using several indicators of government fragmentation and fiscal decentralization for a panel of 23 countries in the 1995-2007 time interval. Taken separately, while various measures of government fragmentation do not seem to affect corruption in any significant way, fiscal decentralization measured as fiscal and spending autonomy does seem to reduce corruption. This latter effect is reinforced if fiscal decentralization is combined with a high degree of government fragmentation at the local level. The results appear robust to different specifications of the empirical model.

Keywords: decentralization; common pool; fiscal autonomy; government fragmentation; corruption (search for similar items in EconPapers)
Pages: 28 pages
Date: 2012-03-23
New Economics Papers: this item is included in nep-geo, nep-pbe and nep-ure
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http://icepp.gsu.edu/files/2015/03/ispwp1217.pdf (application/pdf)

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Chapter: Do fiscal decentralization and government fragmentation affect corruption in different ways? Evidence from a panel data analysis (2013) Downloads
Working Paper: Do fiscal decentralization and government fragmentation affect corruption in different ways? Evidence from a panel data analysis (2013)
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