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- Title
The Effect of Fiscal Decentralization on Corruption: A Non-linear Hypothesis.
- Authors
Alfano, Maria Rosaria; Baraldi, Anna Laura; Cantabene, Claudia
- Abstract
This study advances the literature on the effect of decentralization on corruption by proposing a theoretical motivation for the hypothesis that the corruption minimizing decentralization arrangement prescribes intermediate decentralization degrees: a 'middle' decision-making power of local governors may mitigate the tradeoff between the rent-seeking incentive for local politicians and the effectiveness of their voters' monitoring. The estimation of a non-linear empirical model strongly confirms that a decentralization degree between 15% and 21% minimizes corruption even through different estimation procedures, introduction of control variables and the use of internal and external IV and of alternative decentralization and corruption measurements.
- Subjects
POLITICAL corruption; DECENTRALIZATION in government; FEDERAL government; PUBLIC administration; FISCAL policy
- Publication
German Economic Review, 2019, Vol 20, Issue 1, p105
- ISSN
1465-6485
- Publication type
Article
- DOI
10.1111/geer.12164