The effects of fiscal decentralisation on economic growth in Senegal: An ARDL approach
DOI:
https://doi.org/10.18559/rielf.2024.2.1992Keywords:
fiscal decentralisation, economic growth, ARDLAbstract
Purpose: To evaluate the effects of fiscal decentralization on economic growth in Senegal from 2011 to 2021.
Design/methodology/approach: The fiscal decentralisation indices of revenues and expenditures were calculated. They are alternately the exogenous variables of the two estimated models. Estimates are made using an ARDL (Autoregressive Distributed Lag) model to capture the long-run and short-run dynamics of the effects of decentralisation on the growth rate.
Findings: The results of the study show a significant negative impact of fiscal decentralisation on economic growth in the long term. However, the relationship is not significant in the short term.
Originality/value: These results can be explained by the tax revenue mobilisation process at territorial level, which may depend on the tax decentralisation system adopted. In fact, they enable us to understand the importance of territorial taxation in the development of communes and, consequently, in the economic growth of a country.
JEL Classification
Time-Series Models • Dynamic Quantile Regressions • Dynamic Treatment Effect Models • Diffusion Processes (C22)
State and Local Taxation, Subsidies, and Revenue (H71)
State and Local Budget and Expenditures (H72)
Empirical Studies of Economic Growth • Aggregate Productivity • Cross-Country Output Convergence (O47)
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