The Economic Effects of Federalism and Decentralization – A Cross-Country Assessment

Stefan Voigt and Lorenz Blume ()
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Lorenz Blume: Department of Economics, Universitaet Kassel

No 200905, MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: This paper is based on the conjecture that institutional details matter and that attempts to estimate the economic effects of federalism by drawing on a simple dummy variable neglect potentially important institutional details. Based on a principal component analysis, seven aspects of both federalism and decentralization are used as variables for explaining differences in (1) fiscal policy, (2) government effectiveness, (3) economic productivity, and (4) happiness. The results show that institutional details do, indeed, matter. Different aspects of federalism impact on the outcome variables in different degrees. This study adds to our knowledge on the transmission mechanisms of federalism and decentralization.

Keywords: Federalism; Federalism; decentralization; Fiscal federalism; Economic Effects of constitutions; constitutional economics. (search for similar items in EconPapers)
JEL-codes: H11 H71 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2009
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (2)

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https://www.uni-marburg.de/en/fb02/research-groups ... rs/05-2009_voigt.pdf First version, 2009 (application/pdf)

Related works:
Journal Article: The economic effects of federalism and decentralization—a cross-country assessment (2012)
Working Paper: The Economic Effects of Federalism and Decentralization - A Cross-Country Assessment (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:200905

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