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THE DYNAMIC EFFECT OF FISCAL DECENTRALIZATION ON ECONOMIC GROWTH ROLE OF GOVERNANCE AND MACROECONOMIC STABILITY

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09 Pages : 105 - 116

http://dx.doi.org/10.31703/ger.2021(VI-IV).09      10.31703/ger.2021(VI-IV).09      Published : Dec 2021

The Dynamic Effect of Fiscal Decentralization on Economic Growth: Role of Governance and Macroeconomic Stability

Abstract

    This study investigates the effects of decentralization on output growth in the case of South Asian countries over the period of 1996 to 2018. Further, the study investigates the existence of complementarities between fiscal decentralization with the quality of institutions and macroeconomic stability is affecting economic growth. In order to obtain some flawless results, the study uses a more state-of-the-art technique. The results of Westerlund's co integration test confirm the existence of a long run equilibrium between economic growth and its determinants such as decentralization, human capital,investment, budget deficit, trade openness, governance, and macroeconomic stability. The results of the CS-ARDL method confirm that fiscal decentralization is positively linked with growth, as suggested by the theory. The results further show that the decentralization - growth nexus is strengthened with the improvement in governance and macroeconomic stability. Hence,it is not only fiscal decentralization but its interaction with other factors that enhance output growth.

    Fiscal Decentralization, Governance, and Macroeconomic Stability

    (1) Zenab Faizullah
    Department of Economics, University of Peshawar, KP, Pakistan.
    (2) Zilakat Khan Malik
    Department of Economics, University of Peshawar, KP, Pakistan
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Cite this article

APA

    APA : Faizullah, Z., & Malik, Z. K. (2021). The Dynamic Effect of Fiscal Decentralization on Economic Growth: Role of Governance and Macroeconomic Stability. Global Economics Review, VI(IV), 105 - 116. https://doi.org/10.31703/ger.2021(VI-IV).09

CHICAGO

    CHICAGO : Faizullah, Zenab, and Zilakat Khan Malik. 2021. "The Dynamic Effect of Fiscal Decentralization on Economic Growth: Role of Governance and Macroeconomic Stability." Global Economics Review, VI (IV): 105 - 116 doi: 10.31703/ger.2021(VI-IV).09

HARVARD

    HARVARD : FAIZULLAH, Z. & MALIK, Z. K. 2021. The Dynamic Effect of Fiscal Decentralization on Economic Growth: Role of Governance and Macroeconomic Stability. Global Economics Review, VI, 105 - 116.

MHRA

    MHRA : Faizullah, Zenab, and Zilakat Khan Malik. 2021. "The Dynamic Effect of Fiscal Decentralization on Economic Growth: Role of Governance and Macroeconomic Stability." Global Economics Review, VI: 105 - 116

MLA

    MLA : Faizullah, Zenab, and Zilakat Khan Malik. "The Dynamic Effect of Fiscal Decentralization on Economic Growth: Role of Governance and Macroeconomic Stability." Global Economics Review, VI.IV (2021): 105 - 116 Print.

OXFORD

    OXFORD : Faizullah, Zenab and Malik, Zilakat Khan (2021), "The Dynamic Effect of Fiscal Decentralization on Economic Growth: Role of Governance and Macroeconomic Stability", Global Economics Review, VI (IV), 105 - 116

TURABIAN

    TURABIAN : Faizullah, Zenab, and Zilakat Khan Malik. "The Dynamic Effect of Fiscal Decentralization on Economic Growth: Role of Governance and Macroeconomic Stability." Global Economics Review VI, no. IV (2021): 105 - 116. https://doi.org/10.31703/ger.2021(VI-IV).09