Fiscal Decentralization and Economic Growth

Can Fiscal Decentralization Alleviate Government Consumption Volatility?

“…As pointed out by Bordignon and Piazza (2010, p. 2), "it is selffinancing, more than decentralization per se, the key ingredient of a successful decentralization process." Indeed, own resources are seen to make local governments more likely accountable for their fiscal decision (Bahl and Linn 1992;McLure 1998;Martinez-Vazquez and McNab 2003) as well as residents more informed on how representatives spend public money (Boetti et al 2012 demonstrated that this also increases the local governments" efficiency).…”

Determinants of Expenditure Decentralization: Evidence from China

“…The majority of basic public services are provided by local governments in countries like China. Some argue that expenditure at the local level will increase as the provision of basic public goods will be expensive when wealthier citizens demand diversified and 10 more expensive public services (Martinez-Vazquez & McNab, 2003;Tanzi, 2000;Wheare, 1964). On the other hand, economic development may be negatively related to fiscal decentralization.…”

In Government We Trust: The Role of Fiscal Decentralization

“…Based on the IMF's GFS Manual (2001), sub-national expenditures are defined as expenditures on both the state and local government level, where the state level refers to the largest geopolitical entity within a country and the local level describes the smallest 7 Brehm and Rahn (1997) and Alesina and La Ferrara (2002) Martinez-Vazquez and McNab (2003) and Thornton (2007) for not accurately representing the degree to which sub-national governments have policy autonomy. The OECD (1999) has developed an alternative measure of fiscal decentralization, which takes into account various categories of tax autonomy of sub-national governments.…”