New evidence on fiscal decentralization and the size of government

Arbeitspapier

This paper adds to the literature by utilizing improved data on tax revenue decentralization to re-examine the relationship between fiscal decentralization and the size of government. An econometric analysis using panel data from 18 OECD countries shows that fiscal decentralization matters for both the size and composition of government spending. Tax revenue decentralization is associated with a smaller public sector, while expenditure decentralization is associated with a larger public sector. The former effect seems to be driven by a reduction in social security transfers, while the latter effect seems to be driven by increased government consumption.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1615

Classification and Topics

• Classification: Wirtschaft ; Intergovernmental Relations; Federalism; Secession ; National Government Expenditures and Welfare Programs ; Structure, Scope, and Performance of Government
• Subject: fiscal federalism ; sub-central fiscal autonomy ; government expenditures ; size of government ; Finanzföderalismus ; Staatsquote ; Finanzausgleich ; Öffentliche Ausgaben ; Schätzung ; OECD-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fiva, Jon H.
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/19079
• Last update: 10.03.2025, 11:45 AM CET