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Fiscal Decentralization and Economic Growth. The Recent Experience of Latin America

Abstract:

We examine the relationship between fiscal decentralization (FD) and volume of per capita production, with panel data from 17 Latin American countries during the period 1990-2009. There are different estimates in an extreme-bounds analysis, to determine whether FD is a robust explanatory variable of economic growth. It is found empirical evidence of the long-term and positive momentum of DF on economic growth. Maybe broader levels of autonomy could have promoted positive incentives. It is also possible that promotion of collective goods might enhance the growth rate and utilization of productive resources.