José Luis Sáez Lozano

Fiscal decentralization in specific areas of governments: an empirical evaluation with country panel data

This present paper is intended to explaining fiscal (FD) decentralization across countries end over time. Our contribution is twofold. First; we state that the median voter is faced with a cost versus efficiency trade-off plus numerous institutional restrictions when it comes to the optimum degree of FD, which is defined differently for each type of governments expenditure. In light of this, our empirical analysis examines the case of six specific types of FD, which contrasts with FD being seen a one-dimensional variable. Second, since the available data set from the IMF as well as some of the related variables needed to make the empirical analysis, are incomplete, an imputation procedure is made in order to produce a balanced panel of 44 countries. Results confirm that different State�s functions exhibit different patterns when it comes to the explanatory variable being used.