Fiscal Decentralization Reforms and Local Government Efficiency: An Introduction

Part of the Public Administration, Governance and Globalization book series (PAGG, volume 19)


This chapter is dedicated to the introduction into theory of decentralization. We reviewed past and current theories of decentralization from the classical theories of Oates and Tiebout to the current approaches of the second generation of fiscal federalism and provide a summary of the main results. We linked decentralization with the issue of local government efficiency, which describes how well an organization uses resources in producing services, and effectiveness, the degree to which a system achieves its program and policy objectives. We introduced the main determinants of local government efficiency namely information asymmetry, rational ignorance and rational abstention, bureaucratic behavior, competition among municipalities, fiscal illusion, intergovernmental grants and transfers, municipality size, and the environmental and institutional environment.


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© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Charles UniversityPragueCzech Republic
  2. 2.Charles UniversityPragueCzech Republic
  3. 3.College of Regional DevelopmentPragueCzech Republic
  4. 4.Masaryk UniversityBrnoCzech Republic

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