Fiscal decentralization, governance quality, and regional disparities in Uruguay

  • Leonel Muinelo Gallo Instituto de Economía, Universidad de la República, Montevideo, Uruguay. Autor de contacto: Tel.: +598 24000466; fax: +598 24089586. Dirección: Joaquín Requena 1375, Montevideo
  • Adrián Rodríguez Miranda Instituto de Economía, Universidad de la República, Montevideo, Uruguay. Autor de contacto: Tel.: +598 24000466; fax: +598 24089586. Dirección: Joaquín Requena 1375, Montevideo

Abstract

In this paper we analyze the mediating role of governance quality in the relationship between fiscal decentralization and regional disparities. Previous work has argued that fiscal decentralization has the potential to reduce income differences across regions but that this potential may not be realized because of governance problems associated with sub-national authorities. Our empirical evidence based on a sample of departments (regions) of Uruguay over the period 1990-2010 lends support to this idea. The empirical results show that fiscal decentralization promotes regional convergence, and this effect is boosted in high governance quality settings.
Keywords Fiscal decentralization, regional disparities, governance quality, panel data, Uruguay
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How to Cite
Muinelo Gallo, L., & Rodríguez Miranda, A. (2015). Fiscal decentralization, governance quality, and regional disparities in Uruguay. Estudios de Economía, 41(2), pp. 219-250. Retrieved from https://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/37252/43292
Section
Articles
Published
2015-09-07