In this paper we focus on the relationship between fiscal decentralization and government quality. In a sample of 29 developing and developed countries over the period 1984-1997, fiscal decentralization has a positive effect on institutional quality but this effect diminishes as countries become wealthier. Moreover, the positive effect of fiscal decentralization on government quality is reduced by electoral and decision-making decentralization in poor and medium income countries whereas these forms of decentralization seem to improve the impact of fiscal decentralization on government quality in rich countries. © 2009, Instituto de Estudios Fiscales.
|Journal||Hacienda Publica Espanola|
|Publication status||Published - 16 Dec 2009|
- Fiscal decentralization
- Panel data
- Political decentralization
- Quality of government