Bulletin n. 1/2015 | ||
June 2015 | ||
Ligthart Jenny E., van Oudheusden Peter |
||
In government we trust: The role of fiscal decentralization | ||
in European Journal of Political Economy , Volume 37, March 2015 , 2015 , 116-128 | ||
This paper looks whether fiscal decentralization is associated with trust of citizens in government related institutions. We expect a positive relationship based on the argument of governments' improved responsiveness to preferences of citizens that is perceived to result from more decentralized fiscal systems. Survey data from up to 42 countries over the period 1994–2007 confirm this positive relationship. It is robust to controlling for unobserved country heterogeneity and a wide array of other explanatory variables that are associated with trust in government related institutions. Moreover, we do not find that the positive association with fiscal decentralization extends to other, non-government related institutions. | ||