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Decentralization and the Productive Efficiency of Government: Evidence from Swiss Cantons

Barankay, Ivan and Lockwood, Ben (2005) Decentralization and the Productive Efficiency of Government: Evidence from Swiss Cantons. Working Paper. University of Essex, Department of Economics, Economics Discussion Papers, Colchester.


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Advocates of fiscal decentralization argue that amongst other benefits, it can increase the productive efficiency of delivery of government services. This paper is one of the first to evaluate this claim empirically by looking at the association between expenditure decentralization and the productive efficiency of government using a data-set of Swiss cantons. We first provide careful evidence that expenditure decentralization is a powerful proxy for factual local autonomy. Further panel regressions of Swiss cantons provide robust evidence that more decentralization is associated with higher educational attainment. We also show that these gains lead to no adverse effects across education types but that male students benefited more from educational decentralization closing, for the Swiss case, the gender education gap. Finally, we present evidence of the importance of competence in government and how it can reinforce the gains from decentralization.

Item Type: Monograph (Working Paper)
Uncontrolled Keywords: Decentralization, productive e¢ ciency, local public goods.
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Users 161 not found.
Date Deposited: 28 Aug 2014 13:18
Last Modified: 28 Aug 2014 13:18

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