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Title:New evidence on fiscal decentralization and the size of government PDF Logo
Authors:Fiva, Jon H.
Issue Date:2005
Series/Report no.:CESifo working papers 1615
Abstract:This paper adds to the literature by utilizing improved data on tax revenue decentralization to re-examine the relationship between fiscal decentralization and the size of government. An econometric analysis using panel data from 18 OECD countries shows that fiscal decentralization matters for both the size and composition of government spending. Tax revenue decentralization is associated with a smaller public sector, while expenditure decentralization is associated with a larger public sector. The former effect seems to be driven by a reduction in social security transfers, while the latter effect seems to be driven by increased government consumption.
Subjects:fiscal federalism
sub-central fiscal autonomy
government expenditures
size of government
JEL:H77
H53
H11
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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