Premium
Fiscal Decentralization and Public Sector Size in Australia*
Author(s) -
GROSSMAN PHILIP J.
Publication year - 1992
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1992.tb01770.x
Subject(s) - decentralization , public sector , commonwealth , collusion , economics , fiscal union , state (computer science) , insignificance , economic policy , fiscal policy , political science , macroeconomics , market economy , economy , algorithm , computer science , law , microeconomics , psychology , psychotherapist
This paper examines the impact of fiscal decentralization and intergovernmental collusion, and the resulting fiscal dependence, on the size of the public sector in Australia. Contrary to evidence for the United States, fiscal decentralization is found to have no impact on public sector size in Australia. Three possible explanations for this finding were suggested the relatively small number of lower‐level governments; the economic insignificance of local governments; and the relative immobility of citizens. Fiscal dependence of State governments on the Commonwealth proves a significant determinant of public sector size, consistent with findings for the United States.