Template-type: ReDIF-Paper 1.0
Author-Name: Jorge Martinez-Vazquez 
Author-Email: jorgemartinez@gsu.edu 
Author-Homepage: https://icepp.gsu.edu/profile/jorge-martinez-vazquez/
Author-Workplace-Name:  International Studies Program. Andrew Young School of Policy Studies, Georgia State University
Author-Workplace-Homepage:  https://icepp.gsu.edu/
Author-Name: Robert McNab
Author-Email:
Title: Fiscal Decentralization, Economic Growth, and Democratic Governance 
Abstract:The goal of this paper is to review the state of our knowledge in the economics
 literature on the causal relationship between fiscal decentralization and economic growth
 and democratic governance, whether these relationships are uni-directional or bi-directional,
 and to what extent there appear to exist synergies or pre-conditions between
 fiscal decentralization, on the one hand, and economic growth and democratic governance,
 on the other.Little systematic empirical research has been dedicated to testing the strength of
 the bi-directional links between fiscal decentralization and democratic governance.
 At the present time, we have little knowledge about whether fiscal decentralization is preceded
 by the emergence of democratic institutions, whether fiscal decentralization encourages
 the establishment of local democratic institutions, or whether fiscal decentralization
 and subnational democratic governance occur at the same time. What we know about
 these issues is based on case studies and conjectures and observations from particular country
 experiences. The information base on decentralization and governance has been limited
 because case studies of the fiscal decentralization systems in particular countries often
 pay little attention to governance issues.There are strong reasons a priori to argue
 that there should be a symbiotic relationship between fiscal decentralization and
 democratic governance. Explicitly, and more often implicitly, democratic governance is widely
 acknowledged in the economics literature as a necessary condition for effective
 fiscal decentralization. But clearly, there is wide consensus that the relationship
 also works the other way. Greater fiscal decentralization, especially the devolution
 or delegation of tax and financing and spending powers to subnational governments promotes
 democratic governance through representation and accountability. 
Keywords: Fiscal Decentralization, Economic Growth, Democratic Governance 
Length: 43 pages
Creation-Date: 1997-10-01
File-URL:http://icepp.gsu.edu/files/2015/03/ispwp9707.pdf
File-Format:application/pdf
Handle: RePEc:ays:ispwps:paper9707