Fiscal decentralization, ideology, and the size of the public sector
نویسنده
چکیده
Article history: Received 18 August 2009 Received in revised form 9 February 2011 Accepted 19 March 2011 Available online 13 April 2011 No consensus has yet emerged on whether fiscal decentralization facilitates or impedes the growth of the public sector. One explanation for this ambiguity in the literature is that the effect of fiscal decentralization on public sector size depends on the government's ideology. This paper therefore develops a simple model to study theoretically how interactions between fiscal decentralization and the ideology of the governmentmay influence the size of the public sector. Thereafter, the implications of the model are tested empirically with panel data from 18 OECD countries over the 1980–2000 period. © 2011 Elsevier B.V. All rights reserved. JEL classification: H41 H71 H77
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