Intergovernmental Allocation of Public Resources, Fiscal Decentralization and Economic Growth

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Tianzhu. Cheng 1 Lai Yue 1,*

1. The Financial and Economic Department, Guangxi University of Technology, Liuzhou, P.R. China

* Corresponding author.


Received: 16 Mar. 2011 / Revised: 10 Apr. 2011 / Accepted: 3 May 2011 / Published: 8 Jun. 2011

Index Terms

Government expenditures, transfer payments, revenue autonomy, fiscal decentralization, economic growth


Incorporating a two-level government structure into an endogenous growth model, we discussed the growth impacts of different intergovernmental allocation of public resources, i.e. intergovernmental transfer payments and the power of revenue autonomy of the lower-level government, along with fiscal decentralization. we showed that (1) there was an “Inverted U-shaped” relationship between fiscal decentralization and economic growth; (2) Different intergovernmental allocation of public resources does not affect the “Inverted U-shape” relationship between fiscal decentralization and economic growth.

Cite This Paper

Yue Lai, Tianzhu Cheng, "Intergovernmental Allocation of Public Resources, Fiscal Decentralization and Economic Growth", International Journal of Information Engineering and Electronic Business(IJIEEB), vol.3, no.3, pp.8-15, 2011. DOI:10.5815/ijieeb.2011.03.02


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