تمرکز زدایی مالی، ایدئولوژی، و اندازه بخش عمومی

No consensus has yet emerged on whether fiscal decentralization facilitates or impedes the growth of the public sector. One explanation for this ambiguity in the literature is that the effect of fiscal decentralization on public sector size depends on the government's ideology. This paper therefore develops a simple model to study theoretically how interactions between fiscal decentralization and the ideology of the government may influence the size of the public sector. Thereafter, the implications of the model are tested empirically with panel data from 18 OECD countries over the 1980–2000 period.

Whether fiscal decentralization leads to a reduction or an increase in the size of the public sector is a well researched question within the field of fiscal federalism. The starting point of this literature is Brennan and Buchanan's famous conjecture which states that government intrusion into the economy will be smaller when the public sector is decentralized (Brennan and Buchanan, 1980). Several authors have attempted to test this Leviathan Hypothesis empirically, partly because Brennan and Buchanan explicitly invited researchers to do so,1 and partly because the validity of the hypothesis is based on a controversial view of government. Indeed, Oates (1985) already offers a number of arguments for the opposite relationship between decentralization and public sector size, for example that citizens' willingness to delegate responsibility to the government might increase when the public sector is decentralized. Facing two competing theoretical predictions, Oates (1985) explores the relationship between decentralization and public sector size empirically. He runs two sets of cross-section regressions, first with data on US States and then with international data, using three measures of (de)centralization, and several different specifications. These regressions suggest neither a robust nor a significant relationship between fiscal decentralization and public sector size. The overarching aim of the articles which build upon Oates' influential contribution is to explore the robustness of the finding of no significant relationship by using different data, an improved specification, considering alternative sets of countries, or other measures of decentralization.

This paper is concerned with the relationship between fiscal decentralization and the size of the public sector. We first provide a short overview of the state of the literature. Recognizing that the theoretical link between fiscal decentralization and public sector expansion has not yet been fully explored, we develop a model that relates decentralization and the political affiliation of voters to the size of the public sector. The model results in the empirical hypothesis that fiscal decentralization leads to larger public sectors when the federal government is controlled by a left-wing party, and to smaller public sectors when it is controlled by a right-wing party. We test this hypothesis in the empirical part of the paper. Our results suggest, in contrast to the theoretical hypothesis, that decentralization leads to an increase in the size of government irrespective of the ideology of the central government. However, we also find that the magnitude of the marginal effect is larger under a left- than under a right-wing government. Apparently, the non-ideological effects of decentralization, such as common pool problems, determine the overall direction of the impact of decentralization on public sector size. While the ideological effects are not strong enough to affect the overall direction, they influence its magnitude in a way that is consistent with the theoretical predictions. We therefore find some evidence for a adapted version of our original hypothesis.