Fiscal decentralization and public sector efficiency: Evidence from OECD countries

Adam, Antonis and Delis, Manthos D and Kammas, Pantelis (2012): Fiscal decentralization and public sector efficiency: Evidence from OECD countries.

Abstract

This paper empirically examines the relationship between fiscal decentralization and public sector efficiency. A country-level dataset is used to measure public sector efficiency in delivering education and health services and the new indices are regressed on well-established decentralization measures. The analysis is carried out for 21 OECD countries, between 1970 and 2000. Irrespective of whether public sector efficiency concerns education or health services, an inverted U-shaped relationship has been identified between government efficiency in providing these services and fiscal decentralization. This relationship is robust across several different specifications and estimation methods.

• Item Type: MPRA Paper
• Language: English
• Keywords: Public sector efficiency; fiscal decentralization; OECD countries
• Subjects: H - Public Economics > H5 - National Government Expenditures and Related Policies > H50 - General; H - Public Economics > H1 - Structure and Scope of Government > H11 - Structure, Scope, and Performance of Government; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C14 - Semiparametric and Nonparametric Methods: General; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C24 - Truncated and Censored Models ; Switching Regression Models ; Threshold Regression Models

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