Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152258
Authors: 
Baskaran, Thushyanthan
Feld, Lars P.
Necker, Sarah
Year of Publication: 
2017
Series/Report no.: 
Freiburger Diskussionspapiere zur Ordnungsökonomik 17/01
Abstract: 
Most countries pay substantial intergovernmental transfers to poor regions with the aim of achieving regional convergence. Consequently, transfers should have a positive effect on economic growth. However, it is equally possible that transfers perpetuate under-development. This paper studies empirically the effect of intergovernmental transfers on economic growth with a panel of West German states over the period 1975-2005. The findings suggest that transfers do not foster economic growth, presumably because the recipients use them to subsidize declining industries.
Subjects: 
intergovernmental transfers
economic growth
fiscal federalism
JEL: 
H70
H73
H77
Document Type: 
Working Paper

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