This paper explores the impact of decentralization on countries’ fiscal outcomes paying attention to one aspect usually neglected in the literature: the relevance of self-interested local politics. Relevance that can be proxied by the nationalization of political party systems, namely the...

We study what affects the volatility of sub-central spending in 20 OECD countries. The evidence based on data from 1972 to 2007 shows that the volatility of intergovernmental grants from upper levels is positively associated with the volatility of local expenditure. On the contrary, the...

The aim of the paper is to analyze a model of local public good provision with positive interjurisdictional spillovers comparing decentralized and centralized system. As in the recent Second Generation Theory (SGT) of fiscal federalism (Seabright 1996; Lockwood 2002, 2006; Besley and Coate 2003; Weingast...

The theory of fiscal federalism points out that decentralisation should be pursued in order to fit differences in individual preferences. However, the presence of externalities and the need of providing merit goods to citizens suggest that centralisation is likely to produce more efficient...

This paper investigates whether rumours about Greek exit from the euro area have spilled over into other European countries’ sovereign bond yields. Our empirical analysis is based on more than 64,000 daily news items on Grexit between December 2014 and October 2015. We build a Grexit intensity...

The aim of the paper is to analyze a simple model of local public good provision with positive interjurisdictional spillover effects - as the case of environment protection spending - comparing decentralized and centralized system, when spending and taxation decisions are made by nonbenevolent...

Recent reforms of the National Health Service (NHS) financing system in Italy (D.Lgs. 446/97 and D.Lgs. 56/2000) have potentially given more responsibility for health care to Regions, increasing their power over this function. Starting from this normative process, the aim of the paper is to...

[ENGLISH] The objective of the paper is to evaluate theoretically the effects of the assignment of redistribution function to lower levels of government on individuals' welfare, focusing on the level of national and local income inequality. First studies on fiscal federalism suggested negative...

We study the relationship between discretionary fiscal policy and macroeconomic stability in 21 OECD countries over the 1985–2012 period. The novelties of our contribution lie in the use of annual panel data, whereas most of the existing evidence is cross-sectional, and more importantly in the...