Authors: Rodrguez-Pose, Andrs; Ezcurra, Roberto

Source: Journal of Economic Geography, Volume 11, Number 4, 28 July 2011 , pp. 619-643(25)

Publisher: Oxford University Press

Abstract:

The global drive towards decentralization has been increasingly justified on the basis that greater transfers of resources to subnational governments are expected to deliver greater efficiency in the provision of public goods and services and greater economic growth. This article examines whether this is the case, by analysing the relationship between decentralization and economic growth in 21 Organization for Economic Co-operation and Development countries during the period between 1990 and 2005 and controlling not only for fiscal decentralization, but also for political and administrative decentralization. The results point towards a negative and significant association between fiscal decentralization and economic growth in the sample countries, a relationship which is robust to the inclusion of a series of control variables and to differences in expenditure preferences by subnational governments. The impact of political and administrative decentralization on economic growth is weaker and sensitive to the definition and measurement of political decentralization.

Keywords: fiscal decentralization; political decentralization; administrative decentralization; economic growth; Organization for Economic Co-operation and Develop; H71; H72; H77

Document Type: Research article

DOI: http://dx.doi.org/10.1093/jeg/lbq025

Publication date: 2011-07-28

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• The aims of the Journal of Economic Geography are to redefine and reinvigorate the intersection between economics and geography, and to provide a world-class journal in the field. The journal is steered by a distinguished team of Editors and an Editorial Board, drawn equally from the two disciplines. It publishes original academic research and discussion of the highest scholarly standard in the field of 'economic geography' broadly defined. Submitted papers are refereed, and are evaluated on the basis of their creativity, quality of scholarship, and contribution to advancing understanding of the geographic nature of economic systems and global economic change.

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