Back to Search
Start Over
Fiscal equalization and composition of subnational government spending: implications for regional convergence.
- Source :
- Regional Studies; Apr2019, Vol. 53 Issue 4, p587-601, 15p, 5 Charts, 2 Graphs
- Publication Year :
- 2019
-
Abstract
- This study examines the impact of fiscal equalization payments on the composition of government spending under endogenous growth theory. Analytical conjectures stemming from the model are tested empirically. As an instrumental variable for within-province variations in provinces' equalization entitlements, we use plausibly exogenous variations in the grant eligibility rule for the Canadian fiscal equalization system. We find that fiscal equalization payments have a significant negative effect on the share of productive expenditures and a significant positive effect on the share of unproductive government expenditures. Furthermore, the results show that fiscal equalization lowers the speed of cross-regional convergence in real gross domestic product per worker. [ABSTRACT FROM AUTHOR]
- Subjects :
- EDUCATIONAL equalization
POLITICAL science
GROWTH
LOGICAL prediction
PUBLIC spending
Subjects
Details
- Language :
- English
- ISSN :
- 00343404
- Volume :
- 53
- Issue :
- 4
- Database :
- Complementary Index
- Journal :
- Regional Studies
- Publication Type :
- Academic Journal
- Accession number :
- 135477100
- Full Text :
- https://doi.org/10.1080/00343404.2018.1481287