FLOW OF FISCAL RESPONSIBILITY AMONG LAYERS OF GOVERNMENT: A CASE OF

The issue of fiscal federalism has for quite some time engaged the attention of scholars and policy makers in contemporary Nigeria. Several arguments have been put forward on the economic and political desirability for the practice of fiscal federalism in a country. While the political arguments are largely based on the heterogeneous characteristics of the different regions making up the country, the economic justification is usually based on the need to promote efficiency in the use of national resources. This paper examines the effect of fiscal decentralization on macroeconomic performance in Nigeria. The study employs three measures of fiscal decentralization namely revenue measure, expenditure measure and simultaneity measure to determine the extent, and the impact of fiscal decentralization on macroeconomic performance over the period 1980 to 2010. The overall objective of this study is to analyze the empirical effects of fiscal decentralization on some selected indicators of macroeconomi