Does Fiscal Decentralization Result in a Better Business Climate?

Posted: 17 Sep 2012

See all articles by Sanjukta Roy

Sanjukta Roy

World Bank

Nabamita Dutta

University of Wisconsin - La Crosse

Russell S. Sobel

The Citadel - School of Business

Multiple version iconThere are 3 versions of this paper

Date Written: 2012

Abstract

Previous literature generally finds greater fiscal decentralization associated with faster economic growth. A separate, but related, literature finds greater fiscal decentralization associated with improved government performance, and stronger constraints on the Leviathan behavior of governments. Because economic growth critically depends on the presence of good government policies and institutions, the likely but untested link between these two strands of literature is that greater decentralization probably improves growth because it results in government policies more conducive to entrepreneurship and business success. We test (and confirm) this hypothesis using a variety of business climate measures for the U.S. states.

Keywords: fiscal federalism, business climate, economic growth

Suggested Citation

Roy, Sanjukta and Dutta, Nabamita and Sobel, Russell S., Does Fiscal Decentralization Result in a Better Business Climate? (2012). Applied Economics Letters, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2147643

Sanjukta Roy (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Nabamita Dutta

University of Wisconsin - La Crosse ( email )

1725 State Street
La Crosse, WI 54601
United States

Russell S. Sobel

The Citadel - School of Business ( email )

171 Moultrie St.
Charleston, SC 29409
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
401
PlumX Metrics