Decentralisation and Income Inequality in Central and Eastern European Countries
Journal
Post-Communist Economies
Date Issued
2019
Author(s)
DOI
10.1080/14631377.2018.1461526
Abstract
This paper provides empirical evidence for the association between
fiscal decentralisation and income distribution for a panel of 11
economies from Central and Eastern Europe (CEE) during 1992–2016.
We focus on three research topics: the effect of decentralisation
on income inequality; the effects of the structure of subnational
government finance on income inequality; and the validity of the
Kuznets hypothesis. The main findings from the empirical exercise are
as follows: first, we provide firm evidence on the presumed favourable
effects of fiscal decentralisation on income distribution in the CEE
countries; second, our empirical model suggests that the effects of
fiscal decentralisation on income inequality are dependent on the
source of finance of subnational governments, i.e. intergovernmental
transfers may have a role in income equalisation; third, we cannot
confirm the validity of the Kuznets hypothesis in CEE countries.
fiscal decentralisation and income distribution for a panel of 11
economies from Central and Eastern Europe (CEE) during 1992–2016.
We focus on three research topics: the effect of decentralisation
on income inequality; the effects of the structure of subnational
government finance on income inequality; and the validity of the
Kuznets hypothesis. The main findings from the empirical exercise are
as follows: first, we provide firm evidence on the presumed favourable
effects of fiscal decentralisation on income distribution in the CEE
countries; second, our empirical model suggests that the effects of
fiscal decentralisation on income inequality are dependent on the
source of finance of subnational governments, i.e. intergovernmental
transfers may have a role in income equalisation; third, we cannot
confirm the validity of the Kuznets hypothesis in CEE countries.
Subjects