Assessment of the True Origins of Fiscal Decentralisation in the Selected EU Member States

Abstract

Goals and potential effects of fiscal decentralisation have been analysed in numerous scientific papers and studies. Empirical data shows different or even contradictory results of fiscal decentralisation expansion even though fiscal decentralisation is based on a solid theoretical framework. Fiscal decentralisation might have a positive impact on investment, GDP growth, quality enhancement of healthcare, education and social protection. The purpose of this paper is to provide empirical evidence whether fiscal decentralisation was primarily led by the economic or political rationale in the selected EU member states – 11 CEE and SEE countries. The EU integration process created a pressure on new member states which joined the EU between 2004 and 2013 to implement fiscal decentralisation policies. The goal of this paper is to quantitatively and qualitatively investigate whether all analysed countries followed the fiscal decentralisation path and what were the predominant reasons for fiscal recentralisation.