Forum WHAT DRIVES FISCAL DECENTRALISATION?

This article summarises two papers in which I tryto identify empirical regularities explaining cross-country differences in the level of fiscal central-isation (Panizza 1999) and look at the relationship between centralisation and secession (Panizza 1998). The issues discussed in this article relate to the recent strand of political economy literature that studies the optimal number and size of nations (Alesina and Spolaore 1997, 2003) and the optimal amount of pub-lic goods in countries with heterogeneous preference