The Impact of Fiscal Decentralization on Growth, Inflation, and Inequality in the Americas

Antonio Bojanic

No 1610, Working Papers from Tulane University, Department of Economics

Abstract: This paper analyzes the impact of fiscal decentralization on economic growth, the inflation rate, and the GINI coefficient in eleven American countries. The findings suggest that the expected positive impacts of this process have been modest, with revenue decentralization being more effective at preventing inflation, and expenditure decentralization showing greater tendency to positively influence growth. The flipside of these findings is that in the full sample of countries revenue decentralization deters growth while expenditure decentralization seems to foster inflation. With regards to the impact on the GINI coefficient, fiscal decentralization seems to be, at best, a marginal, negative influence on income distribution. The main recommendation is that American nations should pause and analyze the reasons why this process of fiscal devolution of responsibilities has not delivered on its promise of greater growth, price stability, and less income inequality.

Keywords: Fiscal decentralization; economic growth; inflation; income inequality. (search for similar items in EconPapers)
JEL-codes: E62 H70 O10 O50 (search for similar items in EconPapers)
Date: 2016-08
New Economics Papers: this item is included in nep-lam and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://repec.tulane.edu/RePEc/pdf/tul1610.pdf First Version, August 2016 (application/pdf)

Related works:
Journal Article: The impact of fiscal decentralization on growth, inflation and inequality in the Americas (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:tul:wpaper:1610

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