A fiscal perspective of state rescaling

Abstract

Recent socio-spatial studies point out a number of ongoing trends in the "scale division of labor of the state," including among others, "destatization," "denationalization, and "internationalization." We draw on the literature in public economics to review several approaches to measuring state rescaling.We employ these measures to produce empirical evidence on the extent of state rescaling and its determinants. We find that over the last two decades there has been a world trend towards decentralization while the average government size has not changed.

Reexamining the determinants of fiscal decentralization: what is the role of geography?

“…The results for the other control variable are largely in line with those found in the previous literature. As was found in a good number of previous papers (Wheare, 1953;Bahl and Linn, 1992;Panizza, 1999;Arzaghi and Henderson, 2005;Triesman, 2006;Martinez-Vazquez and Timofeev, 2009), and as predicted by our theoretical framework, the positive sign of the log of GDP per capita shows that countries with higher levels of income tend to be more decentralized. However, the results vary across specifications and the changes tend to be quite dramatic.…”

“…Bahl and Nath (1986), Letelier (2005), Timofeev (2009) andFreikman (2005) find a positive relation between economic development and fiscal decentralization. However, this result is not conclusive, Oates (1972) find a negative relation between economic development and fiscal decentralization and Panizza (1999), finds that the effect differs when outliers are excluded from the analysis.…”

“…Panizza (1999), Letelier (2005) and Martinez-Vazquez and Timofeev (2009) argue that ethnic fractionalization may capture differences in preferences of individuals, which is basically an economic efficiency argument since tastes for public goods and services are likely to vary across ethnic groups. Treisman (2006) states an additional argument towards the inclusion of ethnic variables based on practical politics.…”

In Search of the ‘Economic Dividend’ of Devolution: Spatial Disparities, Spatial Economic Policy, and Decentralisation in the UK

“…Challenging methodological issues are involved in calculating measures able to capture the real degree of autonomy enjoyed by sub-national, regional and local levels of government (Martinez-Vazquez and Timofeev 2009;Torrisi et al 2010). Therefore, due to data constraints and the need for international comparability within a larger study, for decentralisation we adopted a standard and widely used measure of fiscal decentralization based on the local to total general government revenue ratio (Fiscal devolution) using data from Eurostat (Government Finance Statistics).…”

State rescaling and economic convergence

“…As maintained by Storper (2016, p. 243), the comparative data simply do not support the claims made in the radical geography literature that state rescaling is associated with blanket neo-liberalization and the collapse of spatial Keynesianism (see also Martinez-Vazquez & Timofeev, 2009). The beneficial impact of the EU Cohesion Policy can no longer be ignored in this regard.…”