Decentralization and economic growth: Evaluation, measurement, and causality

The concept of decentralization is an issue that for years has attracted the careful attention of scholars, practitioners, and citizens. The general argument of the decentralization concept consists of the fact that, when properly implemented, it can facilitate the economic growth of a nation. Various international organizations (e.g. World Bank and International Monetary Fund) have identified multiple instances where decentralization was an important element of a nation's development strategy. And, although the technical assistance received by these nations from international organizations was essentially comparable, the actual outcomes have varied significantly from country to country. Thus, the relationship between fiscal decentralization and economic growth is uncertain at best.;The primary contribution of this dissertation is its theoretical framework for the empirical measurement of decentralization. The dissertation's research questions are as follows: (1) What are the components of decentralization measurement given its complexity? and (2) What is the direction of causality between economic growth and decentralization? Answering these questions builds on the existing body of knowledge and should contribute to our understanding of the essence of fiscal decentralization and its relationship to economic growth. Such understanding will ultimately be helpful in the identification of specific fiscal decentralization arrangements (e.g., institutional arrangements, governance mechanisms, etc.) that are conducive to better policy decisions and governance.