Arbeitspapier

Fiscal federalism and foreign transfers: does inter-jurisdictional competition increase foreign aid effectiveness?

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.

Language
Englisch

Bibliographic citation
Series: Dresden Discussion Paper Series in Economics ; No. 10/10

Classification
Wirtschaft
Subject
Foreign Aid
Growth
Interjurisdictional Competition

Event
Geistige Schöpfung
(who)
Lessmann, Christian
Markwardt, Gunther
Event
Veröffentlichung
(who)
Technische Universität Dresden, Fakultät Wirtschaftswissenschaften
(where)
Dresden
(when)
2010

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Lessmann, Christian
  • Markwardt, Gunther
  • Technische Universität Dresden, Fakultät Wirtschaftswissenschaften

Time of origin

  • 2010

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