Redistributive efficiency of fiscal policy : the role of decentralisation

This collection includes a selection of research by students of the PhD Program in Applied Economics (UAB) and the Master of Applied Research in Economics and Business (MAREB) - specialization in Applied EconomicsIn this paper, we empirically analyse redistributive efficiency of fiscal policy -instruments and their degree of decentralisation- and its determinants for a sample of thirty-five developed and developing countries over the 2000-2016 period. To do this, a two-stage procedure is followed. First, we estimate the redistributive efficiency of fiscal policy - taking into account size and decentralisation degree of cash transfers and direct taxes- by employing a Data Envelopment Analysis (DEA) method. We obtain evidence that efficiency varies across countries and -on average- has diminished over time. Yet, fiscal decentralisation might not play a role in efficiency. Second, a truncated regression analysis is used to identify the potential factors that might explain redistribution efficiency variation across countries and time. Our results show that efficiency is associated with having a non-federal political system, high government effectiveness and democratic accountability, low education inequality and the existence of debt fiscal rules