Baskaran, T. (2009): Fiscal decentralization, ideology, and the size of the public sector. Forthcoming in: European Journal of Political Economy
Preview |
PDF
MPRA_paper_30188.pdf Download (369kB) | Preview |
Abstract
No consensus has yet emerged on whether fiscal decentralization facilitates or impedes the growth of the public sector. One explanation for this ambiguity in the literature is that the effect of fiscal decentralization on public sector size depends on the government’s ideology. This paper therefore develops a simple model to study theoretically how interactions between fiscal decentralization and the ideology of the government may influence the size of the public sector. Thereafter, the implications of the model are tested empirically with panel data from 18 OECD countries over the 1980-2000 period.
Item Type: | MPRA Paper |
---|---|
Original Title: | Fiscal decentralization, ideology, and the size of the public sector |
Language: | English |
Keywords: | Electoral competition; Fiscal decentralization; Public sector size |
Subjects: | H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations > H77 - Intergovernmental Relations ; Federalism ; Secession H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations > H71 - State and Local Taxation, Subsidies, and Revenue |
Item ID: | 30188 |
Depositing User: | Thushyanthan Baskaran |
Date Deposited: | 18 Apr 2011 11:45 |
Last Modified: | 01 Oct 2019 18:06 |
References: | Armingeon, K., Gerber, M., Leimgruber, P., Beyeler, M., 2008. Comparative political data set 1960-2006. Institute of Political Science, University of Berne 2008 (Database). Baltagi, B. H., 1998. Econometrics. Springer, New York. Beck, T., Clarke, G., Groff, A., Keefer, P., Walsh, P., 2001. New tools in comparative political economy: the database of political institutions. World Bank Economic Review 15, 165–176. Brambor, T., Clark, W. R., Golder, M., 2006. Understanding interaction models: improving empirical analyses. Political Analysis 14, 63–82. Brennan, G., Buchanan, J., 1980. The power to tax: analytical foundations of a fiscal consti- tution. Cambridge University Press, Cambridge. De Mello, L. R., 2000. Fiscal decentralization and intergovernmental fiscal relations: a cross country analysis. World Development 28, 365–380. Feld, L. P., Schneider, F., 2000. State and local taxation. Mimeo (University of Linz). Goodspeed, T. J., 2002. Bailouts in a federation. International Tax and Public Finance 9, 409–421. Grossman, P. J., 1989. Fiscal decentralization and government size: an extension. Public Choice 62, 63–69. Grossman, P. J., West, E. G., 1994. Federalism and the growth of government revisited. Public Choice 79, 19–32. Hindriks, J., Lockwood, B., 2009. Decentralization and electoral accountability: incentives, separation and voter welfare. European Journal of Political Economy 25, 385–397. Jin, J., Zou, H., 2002. How does fiscal decentralization affect aggregate, national, and subna- tional government size? Journal of Urban Economics 52, 270–293. Keen, M. J., Kotsogiannis, C., 2002. Does federalism lead to excessively high taxes? American Economic Review 92, 363–370. Kronmal, R. A., 1993. Spurious correlation and the fallacy of the ratio standard revisited. Journal of the Royal Statistical Society. Series A 156, 379–392. Marlow, M. L., 1988. Fiscal decentralization and government size. Public Choice 56, 259–269. Marshall, M. G., Jaggers, K., 2002. Polity IV project: political regime characteristics and transitions, 1800-2002, dataset users’ manual. Mimeo (University of Maryland). McKee, M. J., Visser, J. C., Saunders, P. G., 1986. Marginal tax rates on the use of labour and capital in OECD countries. In: OECD Economic Studies No. 7, Autumn 1986. OECD. Neyapti, B., 2010. Fiscal decentralization and deficits: international evidence. European Jour- nal of Political Economy 26, 155–166. Oates, W., 1985. Searching for Leviathan: an empirical study. American Economic Review 75, 748–758. Rodden, J., 2003. Reviving Leviathan: fiscal federalism and the growth of government. Inter- national Organization 57, 695–729. Schaltegger, C., Feld, L. P., 2009. Are fiscal adjustments less successful in decentralized governments? European Journal of Political Economy 25, 115–123. Sengupta, B., 2010. Provision of public goods in a federal economy: the role of party politics. European Journal of Political Economy, doi: 10.1016/j.ejpoleco.2010.04.005. Sorribas-Navarro, P., 2010. Bailouts in a fiscal federal system: evidence from Spain. European Journal of Political Economy, doi:10.1016/j.ejpoleco.2010.06.001. Stegarescu, D., 2005. Public sector decentralization: measurement concepts and recent inter- national trends. Fiscal Studies 26, 301–333. Stein, E., 1998. Fiscal decentralization and government size in Latin America. In: Fukasaku, K., Hausmann, R. (Eds.), Democracy, Decentralization and Deficits in Latin America. IDB-OECD, Washington D.C., pp. 95–119. Teorell, J., Samanni, M., Charron, N., Holmberg, S., Rothstein, B., 2010. The quality of gov- ernment dataset, version 27May10. University of Gothenburg: The Quality of Government Institute, http://www.qog.pol.gu.se. Vanhanen, T., 2003. Democratization and power resources 1850-2000. Tampere: Finnish Social Science Data Archive. Weingast, B., Shepsle, K., Johnsen, C., 1981. The political economy of costs and benefits: a neoclassical approach to distributive politics. Journal of Political Economy 89, 642–664. Wooldridge, J. M., 2002. Econometric analysis of cross section and panel data. MIT Press, Cambridge, MA. Zodrow, G. R., Mieszkowski, P., 1986. Pigou, Tiebout, property taxation and the under- provision of local public goods. Journal of Urban Economics 19, 356–370. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/30188 |