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J. Bröthaler, M. Getzner:
"Fiscal Autonomy and Total Government Expenditure: an Austrian Case-study";
International Advances in Economic Research, Volume 17 (2011), Issue 2; 134 - 156.

The ongoing debate on the efficiency of a federal system versus a centralized system has lead to a diverse and unclear empirical picture of the effects of fiscal decentralization on public sector growth. For analyzing these effects it is crucial to consider the sub-national decision power on taxing and spending. In the current paper, we test for the effects of fiscal autonomy on total government expenditure using time series from 1955 to 2007 for Austria. Determinants of government expenditure are economic growth, fiscal illusion of policy makers, and the unemployment rate. We additionally account for different degrees of sub-national fiscal autonomy. Our econometric results suggest that the often-hypothesized dampening effects of fiscal autonomy cannot be corroborated for the Austrian system.

In dem Beitrag wird untersucht, ob bzw. in welchem Ausmaß sub-nationale fiskalische Autonomie zum Staatswachstum in Österreich beiträgt. Die Untersuchung erfolgt für den Zeitraum 1955 bis 2007.

Fiscal autonomy, Decentralization, Federalism, Growth of public sector, Public expenditure

http://dx.doi.org/10.1007/s11294-011-9301-8