Decentralization and tax independence in OECD countries: GDP per capita analysis from 1995–2018
Decentralization and tax independence in OECD countries: GDP per capita analysis from 1995–2018

Summary/Abstract: The association of local and regional self-government is examined in regard to the decentralizationof state administration. This study extrapolated data from 36 Organisation for Economic Cooperationand Development (OECD) countries and analyzed whether decentralization of the stateassists in economic growth and development. Administrative decentralization is explored throughdefining a precedence from the literature. A systematic literature review was conducted andmacroeconomic OECD data using nominal gross domestic product was analyzed for the periodof 1995–2018. The results confirmed that decentralization does not positively correlate withthe level of tax independence of local government and, in effect, is not an advantage. Territorialadministration is highlighted throughout the paper as a key factor behind tax autonomy in relationto fiscal decentralization levels.

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