Decentralization and economic growth: Evidence across states of some relevant macroeconomic variables

Henry Aray () and Luis Pedagua
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Luis Pedagua: University of Leon

No 21/08, ThE Papers from Department of Economic Theory and Economic History of the University of Granada.

Abstract: The objective of this paper is to test the relationship between de- centralization and economic growth across states. A novel methodol- ogy is applied that allows obtaining 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 relationship between fiscal decentralization and economic growth in regions with low public infrastructure stock per efficient worker, high human capital per worker and low total factor produc- tivity (TFP). In addition, in regions with low public infrastructure stock per efficient worker and high human capital, a negative relation- ship between administrative decentralization and economic growth is found.

Keywords: TFP; Spain; Panel Data. (search for similar items in EconPapers)
Pages: 46 pages
Date: 2021-09-28
New Economics Papers: this item is included in nep-cwa, nep-gro and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:gra:wpaper:21/08

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