Review of fiscal decentralization in European countries

Abstract

Fiscal decentralisation has recently emerged as a fundamental issue in the sciences literature. The issue has attracted the attention of both academics and international institutions such as the Organization for Economic Co-operation and Development (Eng. Organization for Economic Co-operation and Development, hereinafter the OECD) gives it an extreme attention as well as the World Bank. Fiscal the World Bank. Fiscal decentralization is an important aspect of fiscal institutions in both developing and developed countries. The article attempts to provide an overview of the fiscal decentralization concept and analyze fiscal decentralization in different EU countries clusters. The empirical results show that, in general, the degree of fiscal decentralization is higher in high economic growth countries than in low economic growth Europe countries. Fiscal decentralization index ranges from 0,75 till 0,28 (0.75 in Sweden and 0.28 in Lithuania and Bulgaria).