31 Pages Posted: 12 Dec 2006
Date Written: December 2006
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 expenditure decentralization and the productive efficiency of government 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
Barankay, Iwan and Lockwood, Ben, Decentralization and the Productive Efficiency of Government: Evidence from Swiss Cantons (December 2006). IZA Discussion Paper No. 2477. Available at SSRN: https://ssrn.com/abstract=950926