Does sub-national tax autonomy promote regional convergence? Evidence from OECD countries (1995-2011)

This paper investigates the simultaneous impact of sub-national tax autonomy and vertical transfers on regional disparities of GDP per head in a sample of 30 OECD countries over the period 1995-2011. Autonomously raised tax revenue as well as vertical transfers are shown to be potential drivers of regional convergence, although the negative marginal impact of transfers on disparities decreases and eventually turns positive as sub-national governments are more transfer dependent. The results indicate that sub-national tax autonomy should be sufficiently broad to allow less developed regions to expand their own revenue base and to catch up with their more developed counterparts.

Jaar van publicatie:2021

BOF-keylabel:ja

IOF-keylabel:ja

BOF-publication weight:1

CSS-citation score:1

Authors from:Higher Education

Toegankelijkheid:Open