Does fiscal decentralization lead to more efficient governance, better public goods, and higher economic growth? This paper tests Riker''s theory (1964) that the results of fiscal decentralization depend on the level of countries'' political centralization. We analyze crosssection and panel data...

Based on a unique data set on Russian city budgets, this paper shows that revenue sharing between regional and local governments provides local governments with no incentive to increase tax base or provide public goods. Any change in local government's own revenues is almost entirely offset by...