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Fiscal decentralization, democracy and government size: Disentangling the complexities
Author(s) -
Kwabena Obeng Samuel
Publication year - 2021
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.3545
Subject(s) - decentralization , democracy , economics , government spending , proxy (statistics) , government (linguistics) , politics , economic system , development economics , political science , market economy , machine learning , computer science , linguistics , philosophy , welfare , law
This paper examines the mediating effect of democracy in explaining the relationship between decentralization and government size for the period 1970–2013. We proxy decentralization by fiscal decentralization, use total spending as our primary measure of government size and adopt the V‐Dem high‐level democracy indices as measures of democracy. Our main finding is that the relationship between fiscal decentralization and government spending differs under different types of democracy. From the interaction term, the negative effect of fiscal decentralization diminishes as the democracy level gets higher, particularly for participatory democracy irrespective of whether government size is measured by spending‐to‐GDP or employment.