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Title:Fiscal federalism and foreign transfers: does inter-jurisdictional competition increase foreign aid effectiveness? PDF Logo
Authors:Lessmann, Christian
Markwardt, Gunther
Issue Date:2010
Series/Report no.:Dresden discussion paper series in economics 10/10
Abstract:This paper empirically studies the impact of decentralization and inter-jurisdictional competition on foreign aid effectiveness. For this purpose we examine a commonly used empirical growth model, considering different measures of fiscal decentralization. Our panel estimations reveal that expenditure decentralization and inter-jurisdictional competition - reflected by the degree of tax revenue decentralization - negatively impact aid effectiveness. We therefore conclude that donor countries should carefully consider how both anti-poverty instruments - foreign assistance and decentralization - work together.
Subjects:Foreign Aid
Growth
Interjurisdictional Competition
JEL:O1
O2
O4
H7
Document Type:Working Paper
Appears in Collections:Dresden Discussion Paper Series in Economics, Faculty of Business and Economics, TU Dresden

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