Complementarity, fiscal decentralization and economic growth

Abstract

Complementarity, Fiscal decentralization, Economic growth, O40, H77,

Fiscal decentralization and economic growth in Colombia: Evidence from regional-level panel data

“…The data cover the 13 most representative regions of the Colombian labour market for the 2001-2012 period. 3 The results are summarized in table 5 and compared with previous estimations by Akai, Nishimura and Sakata (2007) for the United States.…”

“…Barro's growth model was extended by Nishimura (2006) and Akai, Nishimura and Sakata (2007) to capture complementarity between public goods provided by the regions within a country. Programmes implemented in each jurisdiction could have a spillover effect on others, and thence on the national economy.…”

“…Nonetheless, some have argued that this relationship is positive but non-linear, suggesting a hump-shaped association (Akai, Nishimura and Sakata, 2007;Blöchliger, 2013). The "optimal" level of decentralization yielded by this discussion thus fixes a limit beyond which additional decentralization may restrain rather than encourage economic activity.…”

“…To empirically assess complementarity between public goods provided by subnational governments (section III.2), we follow the strategy proposed by Akai, Nishimura and Sakata (2007), which starts by linearizing the production function of section III.1.…”

The Impact of Fiscal Decentralization on Local Economic Development in East Java

“…High and low ratio of direct and indirect spending has no effect on regional economic growth. This condition can occur due to several reasons such as that proposed by Akai, et al (2007) that the relationship of fiscal decentralization on economic growth is hump-shaped. By the time the degree of fiscal decentralization is still low, then an increase in fiscal decentralization will provide a positive and significant impact, both on the revenue indicators and indicators of expenditure.…”