The economics of fiscal decentralisation

Vo, Duc Hong (2010): The economics of fiscal decentralisation. Published in: Journal of Economic Surveys , Vol. 24, No. 4 (September 2010): pp. 657-679.

Abstract

There is no complete overview or discussion of the literature of the economics of federalism and fiscal decentralization, even though scholarly interest in the topic has been increasing significantly over recent years. This paper provides a general, brief but comprehensive overview of the main insights from the literature on fiscal federalism and decentralization. In doing so, literature on fiscal federalism and decentralization is grouped into two main approaches: ‘first generation approach’ and ‘an emerging second generation approach’. The discussion generally covers the two notions of fiscal decentralization: ‘fiscal autonomy’ and ‘fiscal importance’ of subnational governments as the background of the most recently developed index of fiscal decentralization in Vo. The relevance of this discussion to any further development of a fiscal decentralization index is briefly noted.

• Item Type: MPRA Paper
• Language: English
• Keywords: Decentralization theorem; Musgravian fiscal framework; Public choice; Tiebout sorting
• Subjects: H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations

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