Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This article investigates the association between fiscal decentralization and municipality efficiency by conducting an empirical analysis focused on the Italian context. We conduct a cost-efficiency analysis based on a stochastic frontier approach with municipality and time fixed effects modelling the decentralization effect with a continuous variable, taxation autonomy, which allows for accounting for the degree and evolution of fiscal decentralization over time. The empirical analysis provides convincing evidence that fiscal decentralization is positively associated with municipalities’ efficiency. The positive effect is confirmed when additional controls are included into the model and persists to robustness checks. This evidence lends support for policies aimed at making more closely aligned expenditure and revenue decision-making.