Borge, Lars-Erik
[Verfasser:in]
;
Brueckner, Jan K.
[Sonstige Person, Familie und Körperschaft];
Rattsø, Jørn
[Sonstige Person, Familie und Körperschaft]
Partial Fiscal Decentralization and Public-Sector Heterogeneity
Erschienen in:CESifo Working Paper Series ; No. 3954
Umfang:
1 Online-Ressource (39 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.2159642
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 10, 2012 erstellt
Beschreibung:
This paper provides an empirical test of a principal tenet of fiscal federalism: that spending discretion, when granted to localities, leads to public-sector heterogeneity, with public-good levels adjusting to suit local demands. The test is based on a simple model of partial fiscal decentralization, under which earmarking of central transfers for particular uses is eliminated, allowing funds to be spent according to local tastes. The model predicts that partial decentralization generates dispersion in the levels of public services as spending adjusts to local preferences. But the model also yields the more-general prediction that the characteristics of local jurisdictions should play a bigger role in determining the levels of public goods after a decentralization reform than before. Both predictions are confirmed by the paper's empirical results, which show the effects of the 1986 Norwegian reform