## Fiscal Performance, Institutional Design and Decentralization in European Union Countries

_IMF Working Papers, February 1, 2012_

## Source details

**Canonical URL:** [Fiscal Performance, Institutional Design and Decentralization in European Union Countries](https://www.imf.org/en/publications/wp/issues/2016/12/31/fiscal-performance-institutional-design-and-decentralization-in-european-union-countries-25719)

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## Bibliographic details
- Authors: Luc Eyraud, Anita Tuladhar, Julio Escolano, Marialuz Moreno Badia, Juliane Sarnes
- Published: February 1, 2012
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781463936464.001

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### Summary
- This paper analyzes the impact of decentralization on overall fiscal performance in the European Union, taking into account fiscal institutional arrangements.
- Main headline findings:
  - Spending decentralization has been associated with sizably better fiscal performance.
  - The positive association between spending decentralization and fiscal performance is especially pronounced when transfer dependency of subnational governments is low.
  - Subnational fiscal rules do not seem to be associated with better performance.

### Empirical findings
- Spending decentralization → sizably better fiscal performance.
- Low transfer dependency of subnational governments amplifies the positive association between decentralization and fiscal performance.
- Presence of subnational fiscal rules → no observable association with better fiscal performance.

### Thematic scope and keywords
- Subject areas: Expenditure; Fiscal federalism; Fiscal policy; Fiscal rules; Fiscal stance; General government spending; Public financial management (PFM).
- Keywords: access to borrowing; authorities' access; central government; country; Eastern Europe; Europe; European Union; expenditure share; Fiscal decentralization; Fiscal federalism; fiscal institutions; fiscal rules; Fiscal stance; General government spending; government; government tier; Lagged government debt; national government; WP.

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- **Wp1245**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/fiscal-performance-institutional-design-and-decentralization-in-european-union-countries-25719_