Download this Paper Open PDF in Browser

Fiscal Federalism and Long-Run Macroeconomic Performance: A Survey of Recent Research

30 Pages Posted: 7 Mar 2010  

Lars P. Feld

Walter Eucken Institute; University of Freiburg - College of Economics and Behavioral Sciences; CESifo (Center for Economic Studies and Ifo Institute)

Jan Schnellenbach

BTU Cottbus-Senftenberg, Institute for Economics, Chair for Microeconomics; Walter Eucken Institute

Date Written: March 7, 2010

Abstract

In this paper, we offer both a broad survey of the literature on fiscal federalism and long-run economic performance, and a detailed report of some of our own recent studies in this field. We look at the difference between study types (cross-country versus single-country studies), and at the relevance of the broader institutional framework into which fiscal decentralization is embedded. We also look into structural change and intergovernmental transfers as a detailed mechanism through which federalism may have an impact on aggregate economic performance. It turns out that fiscal decentralization has no robust effect on growth, but the evidence hints at a positive effect on overall productivity, conditional on the broader institutional framework.

Keywords: Fiscal Federalism, Fiscal Competition, Economic Growth, Economic Performance

JEL Classification: H70, E63, E65

Suggested Citation

Feld, Lars P. and Schnellenbach, Jan, Fiscal Federalism and Long-Run Macroeconomic Performance: A Survey of Recent Research (March 7, 2010). Available at SSRN: https://ssrn.com/abstract=1566390 or http://dx.doi.org/10.2139/ssrn.1566390

Lars Feld

Walter Eucken Institute ( email )

Goethestrasse 10
Freiburg im Breisgau, Baden-Württemberg D-79100
Germany

University of Freiburg - College of Economics and Behavioral Sciences ( email )

Freiburg, D-79085
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Jan Schnellenbach (Contact Author)

BTU Cottbus-Senftenberg, Institute for Economics, Chair for Microeconomics ( email )

Erich-Weinert-Str. 1
Cottbus, 03046
Germany

HOME PAGE: http://https://www.b-tu.de/fg-vwl-mikro/team/prof-dr-jan-schnellenbach

Walter Eucken Institute ( email )

Goethestr. 10
Freiburg, 79100
Germany

HOME PAGE: http://www.eucken.de

Paper statistics

Downloads
212
Rank
122,589
Abstract Views
1,491