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Title:Costs, Preferences, and Institutions: An Empirical Analysis of the Determinants of Government Decentralization PDF Logo
Authors:Stegarescu, Dan
Issue Date:2005
Series/Report no.:ZEW Discussion Papers 05-39
Abstract:This paper examines the factors determining vertical government structures. An empirical analysis for a panel of OECD countries indicates that apart from preferences, economies of scale, and other factors, institutions explain cross-national differences in the degree of fiscal decentralization. Accounting for taxing powers of subnational governments, the evidence strongly supports the collusion hypothesis according to which delegation of decision-making concerning the assignment of powers and national legislation to subnational representatives leads to increased tax centralization, as compared to direct participation of the citizens of the subnational entities. On the other hand, direct democracy at the national level is associated with higher centralization.
Subjects:Determinants of Decentralization
Decision-making Institutions
Decentralization Theorem
Collusion Hypothesis
Document Type:Working Paper
Appears in Collections:ZEW Discussion Papers, Zentrum für Europäische Wirtschaftsforschung (ZEW)
Publikationen von Forscherinnen und Forschern des Zentrums für Europäische Wirtschaftsforschung (ZEW)

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