 Fiscal Decentralization and Regional Disparity: A Panel Data Approach for OECD CountriesNo 25, ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich Abstract: The advantages and disadvantages of public sector decentralization are widely discussed in economics and political science. While some authors argue that decentralization leads to an optimal provision of public services and a promotion of economic growth, others emphasize the dangers of competition associated with decentralization between subnational governments especially for redistributive reasons. These authors argue that poorer regions could not compete for mobile factors with the richer ones and, therefore, poor regions would get poorer and rich regions richer. This paper studies empirically the impact of fiscal decentralization on regional disparities using panel data for 17 OECD countries from 1980 to 2001. As the measurement of decentralization and regional disparity is one of the main difficulties of this research, both are discussed extensively and different measurement concepts are elaborated. The findings of this study are that a high degree of decentralization is connected with low regional disparities. Hence, poor regions have no disadvantages from decentralization, quite the contrary. JEL-codes: H72 H77 R11 R50 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ces:ifowps:_25 Access Statistics for this paper More papers in ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich Contact information at EDIRC. |
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