Decentralization and the Productive Efficiency of Government: Evidence from Swiss Cantons

Lockwood, Ben; Barankay, Iwan

Purchase - $8 CEPR Subscribers Download

Add Paper to My Library

Decentralization and the Productive Efficiency of Government: Evidence from Swiss Cantons

CEPR Discussion Paper No. 5639

39 Pages Posted: 19 Jul 2006

See all articles by Ben Lockwood

Ben Lockwood

University of Warwick - Department of Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Iwan Barankay

University of Pennsylvania - Management Department; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

There are 2 versions of this paper

Date Written: April 2006

Abstract

Advocates of fiscal decentralization argue that amongst other benefits, it can increase the efficiency of delivery of government services. This paper is one of the first to evaluate this claim empirically by looking at the association between education expenditure decentralization and the productive efficiency of schools using a data-set of Swiss cantons. We first provide careful evidence that expenditure decentralization is a powerful proxy for legal local autonomy. Further panel regressions of Swiss cantons provide robust evidence that more decentralization is associated with higher educational attainment. We also show that these gains lead to no adverse effects across education types but that male students benefited more from educational decentralization closing, for the Swiss case, the gender education gap.

Keywords: Decentralization, productive efficiency, local public goods

JEL Classification: H40, H52, H70, I20

Suggested Citation: Suggested Citation

Lockwood, Ben and Barankay, Iwan, Decentralization and the Productive Efficiency of Government: Evidence from Swiss Cantons (April 2006). CEPR Discussion Paper No. 5639, Available at SSRN: https://ssrn.com/abstract=918274