Government Size, Decentralisation and Growth
Applied Economics, DOI: 10.1080/00036846.2017.1409417, ISSN: 1466-4283
Posted: 10 Jan 2018
Date Written: 2017
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: Suggested Citation