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Scope of the state and fiscal decentralization. An approach from the Latin America experience

Abstract:

This article explores the relationship between fiscal decentralization and the size of the public sector for 17 Latin American countries from 1990 to 2009, using cointegration, causality and panel regression estimation techniques. We conclude that there is a link between increased global governments and their decentralization process, due to the increase in the sub-national government size, without decreasing the central governments size. Paradoxically, we see some support to Leviathan hypothesis, however we found a negative relationship between the government's final consumption and the sub-national revenue. © Revista de Economía del Rosario.