This paper attempts to address two long standing questions in Public Finance: (i) why is the property tax, despite popular complaints about its fairness, the almost exclusive tax instrument used by local governments, and (ii) why do we consistently observe higher levels of governments undermine...

We show that the efficacy of fiscal decentralization in enhancing economic growth and labor productivity growth depends on whether taxes are collected at the central level or at the sub-national level. To empirically examine the differential effects, we introduce a distinct measure of fiscal...