Fiscal Decentralization and Economic Growth: Evidence from Selected Muslim Countries
Since 1970 era, the discussion about fiscal decentralization becomes an important subject. A recent World Bank study found that of the 75 developing and transition countries in the world with populations greater than 5 million, all but 12 claim to be embarked on some transfer of fiscal power from the central to sub national governments. This is a revolu-tion of how people think fiscally. The subject has also attracted many researchers to explore the decentralization system. As such many researchers mainly try to focus that fiscal decen-tralization would have a significant effect on economic growth. Empirically, these research-ers also prove that the decentralization approach of a nation's fiscal structure is an effective strategy to promote economic growth. The central structure of fiscal decentralization is the degree that creates growth-promoting decentralization systems that distinguish decentraliza-tion system capabilities in promoting economic growth to a greater or lesser degree. Hence, this paper will provide the empirical evidence for selected Muslim countries where these countries adopt the differences approaches in fiscal decentralization, i.e., transition coun-tries versus countries with a well-functioning fiscal system.
JEL classification: H7; O4
Keywords: fiscal decentralization; economic growth
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Economic Journal of Emerging Markets (EJEM)
ISSN 2086-3128 (print), ISSN 2502-180X (online)
Center for Economic Studies, Department of Economics,
Universitas Islam Indonesia, Indonesia.
EJEM by http://journal.uii.ac.id/JEP/ is licensed under a Creative Commons Attribution 4.0 International License.