Can Fiscal Decentralization Alleviate Government Consumption Volatility?

Davide Furceri, Davide Furceri, Simone Salotti, Agnese Sacchi

Risultato della ricerca: Articlepeer review

2 Citazioni (Scopus)


This paper assesses the effect of fiscal decentralization on government consumption volatility using data for 97 developed and developing countries from 1971 to 2010. The results suggest that a higher degree of fiscal decentralization leads to lower government consumption volatility. This result holds for the sub-sample of advanced economies, while it is not confirmed for those less-developed. This mechanism seems to work mainly through a lower volatility of the non-discretionary spending, which typically belongs to the central governmentâs policy. We also confirm existing findings according to which country size lowers government spending volatility. Thus, given a minimum level of development, fiscal decentralization reforms can reduce spending volatility by distributing power to sub-central governments, particularly in smaller countries which are usually more prone to volatility.
Lingua originaleEnglish
pagine (da-a)611-636
Numero di pagine26
RivistaOpen Economies Review
Stato di pubblicazionePublished - 2016

All Science Journal Classification (ASJC) codes

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