Does fiscal decentralisation foster regional investment in productive infrastructure?

Arbeitspapier

The aim of this paper is to analyze the effect of revenue decentralization on the provision of infrastructure at the sub-national level. We estimate the effects of revenue decentralization and earmarked grant financing on the level of sub-national infrastructure investment in 20 European countries over the period 1990-2009. The results are interpreted in light of the predictions of the theory on fiscal federalism. We find that it is sub-national infrastructure investment that increases after revenue decentralization and not investment in redistribution. However, the effect of revenue decentralization is lower the higher the use of earmarked grants to fund infrastructure investment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DIW Discussion Papers ; No. 1204

Classification and Topics

• Classification: Wirtschaft ; National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock ; Intergovernmental Relations; Federalism; Secession ; State and Local Government: Other Expenditure Categories ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
• Subject: regional investment ; fiscal federalism ; dynamic panel data

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kappeler, Andreas ; Solé-Ollé, Albert ; Stephan, Andreas ; Välilä, Timo
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/61424
• Last update: 10.03.2025, 11:43 AM CET