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Title:Does fiscal decentralisation foster regional investment in productive infrastructure? PDF Logo
Authors:Kappeler, Andreas
Solé-Ollé, Albert
Stephan, Andreas
Välilä, Timo
Issue Date:2012
Series/Report no.:Discussion Papers, German Institute for Economic Research, DIW Berlin 1204
Abstract:The aim of this paper is to analyze the effect of revenue decentralization on the provision of infrastructure at the sub-national level. We estimate the effects of revenue decentralization and earmarked grant financing on the level of sub-national infrastructure investment in 20 European countries over the period 1990-2009. The results are interpreted in light of the predictions of the theory on fiscal federalism. We find that it is sub-national infrastructure investment that increases after revenue decentralization and not investment in redistribution. However, the effect of revenue decentralization is lower the higher the use of earmarked grants to fund infrastructure investment.
Subjects:regional investment
fiscal federalism
dynamic panel data
JEL:H54
H77
H76
C23
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
DIW-Diskussionspapiere

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