Fiscal Decentralization and Public Spending: Evidence from Heteroscedasticity-Based Identification

Identifier:  imarina:5131937

Handle: https://hdl.handle.net/20.500.11797/imarina5131937

Authors:  Herwartz, Helmut; Theilen, Bernd

Abstract:
© 2017 Walter de Gruyter GmbH, Berlin/Boston. We analyse the instantaneous relation between public spending and expenditure decentralization by means of a novel identification scheme suggested in Lewbel (2012). Our cointegration, error-correction approach indicates that expenditure decentralization impacts negatively on total public spending and most of its subcategories.