The Impact of Local Decentralization on Economic Growth: Evidence from U.S. Counties

George Hammond () and Mehmet Tosun

No 4574, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We analyze the impact of fiscal decentralization on U.S. county population, employment, and real income growth. Our findings suggest that government organization matters for local economic growth, but that the impacts vary by government unit and by economic indicator. We find that single-purpose governments per square mile have a positive impact on metropolitan population and employment growth, but no significant impact on nonmetropolitan counties. In contrast, the fragmentation of general-purpose governments per capita has a negative impact on employment and population growth in nonmetropolitan counties. Our results suggest that local government decentralization matters differently for metropolitan and nonmetropolitan counties.

Keywords: employment; population; nonmetropolitan; metropolitan; fiscal decentralization; income; spatial econometrics (search for similar items in EconPapers)
JEL-codes: E62 H7 R11 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2009-11
New Economics Papers: this item is included in nep-fdg, nep-geo, nep-mac, nep-pbe and nep-ure
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Citations: View citations in EconPapers (12)

Published - published in: Journal of Regional Science, 2010, 20 (10), 1-18

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Related works:
Journal Article: THE IMPACT OF LOCAL DECENTRALIZATION ON ECONOMIC GROWTH: EVIDENCE FROM U.S. COUNTIES (2011)
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