| Fiscal decentralization has been a popular policy in the world during the past decade. The relationship between fiscal decentralization and economic growth has received more attention. After reviewing the current knowledge, we have only a passing acquaintance with the mechanism between them. This paper emphasize particularly on the mechanism to understand the relationship. This study organized as follows. Section 1 sketches the academic value of this research and its policy implications. Section 2 reviews the current knowledge in the economics literature o the causal relationship between fiscal decentralization and economic growth. Section 3 introduces the direction of this paper and explains some conceptions. Section 5 discusses the domino effect from economic development to fiscal decentralization, and points out that the revenue-demand reflection; the intermediate-demand reflection and the supply reflection following the economic development may cause the change of fiscal decentralization. In an empirical model, this section finds economic development was a positive factor to fiscal decentralization in developed countries, but in the developing countries the relationship may be more complex. Section 6 studies the effect from fiscal decentralization to economic growth, and discusses the resource collocation reflection and the institution-environment reflection of fiscal decentralization to economic growth. In an empirical study, this section finds fiscal decentralization accelerates economic growth in some case. But whether this is ubiquitous has not been proven. Section 6 analyzes the relationship between fiscal decentralization and economic growth in China and finds the change of fiscal decentralization in China can be explained from the growth of GDP per capita, but the fiscal decentralization contributes to economic growth can not be found. Section 7 summarizes the conclusion and some limitations of the study. This section also talks over some issue of further work on it. |
PDF Full Text Request