Prior analyses of the relationship between fiscal decentralization and the size of government treat fiscal decentralization as the decentralization of either taxing or spending powers. But decisions about taxation and spending are inseparable. The author corrects this deficiency and analyzes the...

This paper develops an econometric technique that deals with shortcomings of existing methods for estimating the tax elasticity and the impact on revenues of discretionary tax measures. This model highlights the roles that discretionary tax measures and economic growth play in effecting the...