Original scientific paper

https://doi.org/10.3326/pse.47.2.5

Fiscal decentralization and economic growth: evidence from Brazilian states

Pedro Jorge Holanda Figueiredo Alves ; Catholic University of Brasilia, QS 07, Lote 01, Taguatinga Sul – Taguatinga, Brasília – DF, 71966-700
Jevuks Matheus Araujo ; Federal University of Paraiba, Campus I Lot, Cidade Universitaria, PB, 58051-900
Ana Karolina Acris Melo orcid.org/0000-0002-9688-1249 ; Federal University of Paraiba, Campus I Lot, Cidade Universitaria, PB, 58051-900
Eduarda Mashoski ; Federal University of Paraiba, Campus I Lot, Cidade Universitaria, PB, 58051-900

Abstract

This paper investigates the relationship between fiscal decentralization and economic growth in Brazilian states from 1996 to 2015. Using five decentralization measures and the GMM-System model to address the endogeneity problem, we have identified a positive relationship between the indicators of fiscal decentralization and economic growth and observed that the industry and service sectors are the most affected by this decentralization. Our results suggest that local governments with more autonomy make states more efficient, thus increasing economic growth.

Keywords

decentralization; economic growth; Brazilian states; GMM-System

Hrčak ID:

303960

URI

https://hrcak.srce.hr/303960

Publication date:

12.6.2023.

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