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Décentralisation financière, fédéralisme et croissance : une approche par la qualité de gouvernance

Authors
Disciplines
  • Economics
  • Political Science

Abstract

This article examines how fiscal decentralization can help improve economic growth (assuming predatory governments). The calculation of the optimal level of regionalism involves a trade-off between the positive effect due to "proximity", and the negative effect linked to "coordination failures" (due to externalities, small independent regions fail to implement a sufficient level of public spending). Then, using a recent "Good Governance Measures" data base, we give consistent empirical evidence. Finally, the article shows that a super-center -which centralizes taxes and decentralizes spending- should achieve a better growth rate than the non coordinated solution featuring no center. In that way, "federalism" is the optimal rule.

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