Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/30482 
Year of Publication: 
2009
Series/Report no.: 
CESifo Working Paper No. 2766
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper explores the idea that institutional details matter and that attempts to estimate the economic effects of federalism by employing a simple dummy variable neglect potentially important institutional details. Based on a principal component analysis, seven aspects of both federalism and decentralization are used as variables for explaining differences in (1) fiscal policy, (2) government effectiveness, (3) economic productivity, and (4) happiness. The results show that institutional details do, indeed, matter. Different aspects of federalism impact on the outcome variables to different degrees. This study adds to our knowledge on the transmission mechanisms of federalism and decentralization.
Subjects: 
federalism
decentralization
fiscal federalism
economic effects of constitutions
constitutional economics
JEL: 
H71
H11
Document Type: 
Working Paper
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