On the Measurement and Impact of Fiscal Decentralization

By R. Ebel, Serdar Yilmaz. 2002

544 citations recorded by the source corpus.

The typical post-Bretton Woods era development approach that emphasized central government-led development efforts has changed dramatically, and local governments have clearly emerged as players in development policy. The thinking about what is important to achieve in development objectives is changing as fiscal decentralization reforms are being pursued by many countries around the world. In this context, a number of studies have attempted to quantify the impact of decentralization by relating some measure of it to economic outcomes of fiscal stability, economic growth, and public sector size. But decentralization is surprisingly difficult to measure. Nearly all cases examining the relationship between decentralization and macroeconomic performance have relied on the Government Finance Statistics (GFS) of the International Monetary Fund. However, despite its merits, GFS falls short in providing a full picture of fiscal decentralization. For some countries, however, there is data that more accurately captures fiscal responsibilities among different types of governments.

Subfields: Economics and Econometrics, Political Science and International Relations

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Citations in the corpus

Fiscal decentralization, revenue and expenditure assignments, and growth in China (2005, methodology): “For example, for the six-country sample data for 1999 used in Ebel and Yilmaz (2001), the mean of sub-national expenditure share in total government revenue is 22%, while the mean of sub-national own-taxes revenue share in total government revenue is only 6.2%. Since sub-national governments’ own-ta”
Fiscal decentralization and public sector efficiency: evidence from OECD countries (2013, background): “In particular, it has been pointed out that the GFS measure tends to overestimate the share of government expenditure and tax revenues that is controlled by sub-national governments and that it does so in a way that varies widely across countries (Ebel and Yilmaz, 2003).”
On the link between fiscal decentralization and public debt in OECD countries (2010, methodology): “For example, Eichenberger and Schelker (2007) show for Swiss cantons that the existence of so called Finance Commissions, which are elected separately from the government as an independent review body of budget decisions, leads to smaller tax burdens.”
FISCAL DECENTRALIZATION AND ECONOMIC GROWTH: SPENDING VERSUS REVENUE DECENTRALIZATION (2013, background): “…contrast, recent studies have focused on a more restricted measure of FD: local government spending net of conditional or discretionary transfers (Ebel and Yilmaz 2004; Meloche, Vaillacourt, and Yilmaz 2004) and local revenues over which subnational governments have some degree of control over…”
Government Decentralization as a Disincentive for Transnational Terror? An Empirical Analysis (2009, unknown): “18 See Treisman (2002) and Ebel and Yilmaz (2002) for a more detailed discussion.”
Decentralization and efficiency of local government (2010, background): “Both of them reduce the cost of bureaucracy, resulting in efficiency gains due to the enhanced abilities of the constituencies to monitor their representatives (Putnam 1993; Ebel and Yilmaz 2002 ).”
Public Sector Decentralization: Measurement Concepts and Recent International Trends (2005, methodology): “With regard to the limitations of fiscal indicators based on GFS data, see also Ebel and Yilmaz (2003) and the World Bank decentralization project. (13)See, e.g., Zimmermann (1973).”