Chapter 55

Fiscal Decentralization

Dennis Epple 1     Carnegie Mellon University, USA.

1. Also affiliated with NBER.

Thomas Nechyba Duke University, USA. Duke University. USA

JEL classification: H1, H7, R1, R3, R5

Abstract

Fiscal decentralization is on the rise worldwide while barriers to factor and population mobility are declining. Greater decentralized government activity is therefore taking place in an economic environment characterized by increased competition for mobile resources, and government policy within this environment is increasingly cognizant of profound implications this combination of decentralization and mobility may have on political and economic outcomes. As these trends have become important, the academic literature ...

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