2017/12/04 by Giuseppe Di Liddo, Cosimo Magazzino, Francesco Porcelli · 1 citation
Economics, Econometrics and Finance · Social Sciences · #Fiscal Policy and Economic Growth #Local Government Finance and Decentralization #Economic Growth and Productivity
paper · doi:10.1080/00036846.2017.1409417
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%.