Revisiting the nexus between fiscal decentralization and government size-The role of ethnic fragmentation
A Choudhury, S Sahu - European Journal of Political Economy, 2022 - Elsevier
The extant literature on the relationship between fiscal decentralization and government size
provides mixed evidence. In this paper, we use a panel of 65 developed and developing
countries from 1972 to 2013 to analyse the role of ethnic fragmentation as a mediator in this
relationship. Using FGLS for heterogeneous panels, system GMM and instrumental variable
methods, we find that fiscal decentralization is inversely associated with government size,
but the relationship is positive and significant when variation in ethnic fragmentation is …
provides mixed evidence. In this paper, we use a panel of 65 developed and developing
countries from 1972 to 2013 to analyse the role of ethnic fragmentation as a mediator in this
relationship. Using FGLS for heterogeneous panels, system GMM and instrumental variable
methods, we find that fiscal decentralization is inversely associated with government size,
but the relationship is positive and significant when variation in ethnic fragmentation is …
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