Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/110780
Authors: 
Asatryan, Zareh
Feld, Lars P.
Geys, Benny
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5279
Abstract: 
Recent theoretical research suggests that financing sub-national governments’ expenditure out of own revenue sources is linked to more responsible budgeting, because the financial implications of spending decisions then are internalized within a jurisdiction. We test this proposition empirically on a sample of 23 OECD countries over the 1975-2000 period, and find evidence in line with the hypothesis that greater revenue decentralization (measured as sub-national governments’ share of own source tax revenues in general government tax revenue) is associated with improved sub-national government budget deficits/surpluses. This finding is cross-validated with a novel, independent dataset consisting of all 34 OECD member states from 2002 to 2008.
Subjects: 
fiscal federalism
revenue autonomy
budget deficits
JEL: 
H62
H71
H77
E61
Document Type: 
Working Paper

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