FISCAL DECENTRALIZATION AND ECONOMIC PERFORMANCE:A PANEL ANALYSIS FOR SUB-SAHARAN AFRICA FROM 1999 TO 2007.

In recent years, fiscal decentralization, which reassigns expenditure functions and devolves revenue sources to lower levels of government, has been discussed in a number of countries around world. Although many developing countries have devoted themselves to decentralization, it is still arguable whether decentralization stimulates economic performance. In theory, it is expected that decentralization leads to efficient provision of local public services and stimulates national economy. Earlier empirical literature indicates that the relationship between decentralization and growth in unclear. Therefore the aim of this paper is to empirically readdress the question of whether fiscal decentralization stimulate economic performance, using the latest sub-Saharan countries panel data from 1999-2007. [ABSTRACT FROM AUTHOR]