Fiscal Decentralization and Government Size: An Extension

Philip Grossman

Monash Economics Working Papers from Monash University, Department of Economics

Abstract: This paper analyzes one method governments employ to circumvent the discipline of a competitive system of fiscal federalism - intergovernmental collusion in the form of intergovernmental grants. Grants, it is argued, serve to encourage the expansion of the public sector by concentrating taxing powers in the hands of the central government and by weakening the fiscal discipline imposed on governments forced to self-finance their expenditures. The results reported suggest that intergovernmental grants do encourage growth in the public sector. The results offer further support for the use of monopoly government assumptions in public sector modeling.

Pages: 4 pages
Date: 1989
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Citations: View citations in EconPapers (92)

Published in Public Choice, Vol. 62, No. 1 (Jul., 1989), pp. 63-66

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Journal Article: Fiscal decentralization and government size: An extension (1989)
Working Paper: Fiscal Decentralization and Government Size: An extension (1988)
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