Fiscal Decentralization and Governance : A Cross-Country Analysis

Author/Editor:

International Monetary Fund

Publication Date:

May 1, 2001

Electronic Access:

Free Full Text. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Based on cross-country data for up to 78 countries, this paper shows that fiscal decentralization-the assignment of expenditure and revenue mobilization functions to subnational levels of government-is associated with various indicators of governance, such as corruption, rule of law, and government effectiveness. Unlike previous studies in the decentralization/governance literature, which focus primarily on expenditure-based measures of decentralization, the results reported in this paper show that the relationship between decentralization and governance depends on how subnational expenditures are financed. The higher the share in total subnational revenues of nontax revenues and grants and transfers from higher levels of government, the stronger the association between decentralization and governance.

Series:

Working Paper No. 01/71

Subject:

English

Publication Date:

May 1, 2001

ISBN/ISSN:

9781451849240/1018-5941

Stock No:

WPIEA0712001

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

30

Please address any questions about this title to publications@imf.org