In Government We Trust: The Role of Fiscal Decentralization

J.E. Ligthart, P. van Oudheusden

Research output: Working paperDiscussion paperOther research output

Abstract

We measure the contribution of fiscal decentralization to trust in government. Using repeated cross-country survey data of individuals on several measures of trust in govern- ment over the 1994-2007 period, we estimate an ordered response model of the government trust and fiscal decentralization nexus. We control for unobserved country characteristics, macroeconomic determinants, and individual characteristics. Our main finding is that fiscal decentralization increases trust in government. More specifically, a one percentage point increase in fiscal decentralization causes roughly a four-fifths of a percentage point increase in government trust. The beneficial effect of fiscal decentralization on trust in government is neither limited to nor necessarily large for relatively decentralized countries.
Original languageEnglish
Place of PublicationTilburg
PublisherEconomics
Volume2011-073
Publication statusPublished - 2011

Publication series

NameCentER Discussion Paper
Volume2011-073

Keywords

  • Fiscal Decentralization
  • Government Trust
  • Social Capital

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