Understanding Fiscal Decentralization: Theory, Empirics and Prospects

by Bilin Neyapti

Overview

This book provides a comprehensive overview of fiscal decentralization (FD), outlining how it interacts with domestic structures and institutions. It reviews both theoretical and empirical literature relating to macroprudential institutions and macroeconomic outcomes, arguing that the complex relationship between FD and economic development undermines a one-size-fits-all approach for FD design.

The book delves into shifting macroeconomic paradigms and evaluates FD in relation to the first- and second-generation fiscal decentralization literature. In light of rapid technological advancements and geopolitical changes, the book also delves into increasingly relevant issues such as fiscal discipline, income distribution, inflation and economic crises. In addition to graphical analysis to showcase international FD trends, as well as empirical analysis to show FD’s relationship with macroeconomic outcomes, a benchmark theoretical model is presented to assess the benefits from FD. It also looks ahead by considering the prospects and pitfalls for the future of FD.

This book is an essential resource for students and academics in public economics and fiscal policy. Its valuable insights will greatly benefit professionals and policymakers in political economy and public economics.

Product Details

ISBN-13:	9781803925561
Publisher:	Edward Elgar Publishing
Publication date:	07/10/2025
Series:	Understanding series
Pages:	152
Product dimensions:	5.38(w) x 8.50(h) x (d)

About the Author

Bilin Neyapti, Associate Professor of Economics, Bilkent University, Turkey

Table of Contents

Contents
Preface
1 Introduction: understanding fiscal decentralization
2 The theory of fiscal decentralization
3 A benchmark model: fiscal decentralization versus
centralization
4 Empirical evidence on fiscal decentralization
5 Conclusions and further implications
References

Editorial Reviews

‘This new book by Professor Bilin Neyapti is a most impressive contribution to the rapidly growing and much appreciated literature on fiscal decentralization. It concisely but thoroughly reviews the theory of fiscal decentralization (divided into two generations in time since its emergence), provides a thorough critical review of the empirical evidence on its validity, and offers an exciting discussion of its future prospects for maintaining political, economic and distributional stability. The book focuses on bringing all readers up to date in understanding both the potential for welfare improvement but also the potential challenges to efficiency and stability resulting from fiscal decentralization as it has spread throughout the world in the last century. It is a perfect fit for the Elgar Understanding series.’

Jeffrey Nugent

‘This is a timely book on an important topic that offers interesting new insights. It is written by an expert on fiscal decentralization. A must read for everyone interested in fiscal decentralization.’

Jakob de Haan