Reexamining the determinants of fiscal decentralization: What is the role of geography? -Journal of Economic Geography-
In December 2016, Jorge Martinez-Vazquez, Gustavo Canavire-Bacarreza and Bauyrzhan Yedgenov published an article in the Journal of Economic Geography exploring in depth the empirical relevance of physical geography as a determinant of fiscal decentralization.
Canavire-Bacarreza, Gustavo, Jorge Martinez-Vazquez, and Bauyrzhan Yedgenov. 2016. “Reexamining the determinants of fiscal decentralization: What is the role of geography?” Journal of Economic Geography. DOI 10.1093/jeb/lb032.
“This paper contributes to the existing literature on the determinants of fiscal decentralization by exploring in depth the empirical relevance of physical geography as a determinant of fiscal decentralization; more geographically diverse countries show greater heterogeneity among their citizens. The theoretical framework imbeds geography into the concept of spatial decay in the provision of public services and our empirical estimation employs a panel data set for 94 countries for the period 1970–2010. Following the ‘first nature’ geography literature we construct a geographical fragmentation index based on elevation data and find that geographical fragmentation and area are significantly and positively related to fiscal decentralization. Following the ‘second nature’ geography literature we interact the geographical fragmentation index with time variant infrastructure variables, in order to test the effect that infrastructure and communications have on physical geography and fiscal decentralization. While the development of infrastructure tends to reduce the effect of physical geography on decentralization, this effect is rather small and mostly statistically insignificant.” -Journal of Economic Geography-
Martinez-Vazquez is a Regents Professor of Economics and Director of the International Studies Program (ICePP) at the Andrew Young School of Policy Studies at Georgia State University. Canavire-Bacarreza is currently a Professor of Economics and Director of the Center for Research on Economics and Finance at the Universidad EAFIT in Medellin, Colombia. He is also an AYS alumni who previously worked as a Research Associate in ICePP. Yedgenov is a Research Associate with ICePP and graduate student in the AYS Department of Economics.
Regents Professor of Economics; Director ICePP (AYSPS)
Area of Expertise: Fiscal Decentralization, Tax Policy
Professor of Economics and Director of the Center for Research on Economics and Finance at the Universidad EAFIT, Medellin, Colombia
Research Associate, ICePP (AYSPS)