Government Size, Decentralisation and Growth

Applied Economics, DOI: 10.1080/00036846.2017.1409417, ISSN: 1466-4283

Posted: 10 Jan 2018

See all articles by Cosimo Magazzino

Cosimo Magazzino

University of Rome III; Royal Economic Society; Italian Economic Association

Giuseppe Di Liddo

Università degli Studi di Bari “Aldo Moro” (UNIBA) - Department of Economics and Mathematical Methods

Francesco Porcelli

University of Warwick

Date Written: 2017

Abstract

The aim of this study is to empirically assess the relationship among government size, decentralization and economic growth in Italian ordinary regions. The empirical analysis, based on a panel dataset on Italian regions, provides evidence in support of the existence of an inverted U-shaped relationship between public expenditure and economic growth, that depends on the degree of fiscal decentralization. In particular, according to our estimates on the specific Italian case, the optimal degree of decentralization is around 32%, while the optimal government size value is approximately 52%.

Keywords: Government size, fiscal decentralization, Leviathan, Italy

JEL Classification: H11, H60

Suggested Citation

Magazzino, Cosimo and Di Liddo, Giuseppe and Porcelli, Francesco, Government Size, Decentralisation and Growth (2017). Applied Economics, DOI: 10.1080/00036846.2017.1409417, ISSN: 1466-4283, Available at SSRN: https://ssrn.com/abstract=3094712

Cosimo Magazzino (Contact Author)

University of Rome III ( email )

Via Ostiense 139
Rome, RM 00154
Italy

HOME PAGE: http://scienzepolitiche.uniroma3.it/cmagazzino/

Royal Economic Society ( email )

London
United Kingdom

Italian Economic Association ( email )

Piazzale Martelli, 8
Ancona, AN 60121
Italy

HOME PAGE: http://www.siecon.org/online/en/

Giuseppe Di Liddo

Università degli Studi di Bari “Aldo Moro” (UNIBA) - Department of Economics and Mathematical Methods ( email )

Largo Abbey St. Scholastica
Bari, 70124
Italy

Francesco Porcelli

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

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