Decentralization of Social Protection Expenditure and Economic Growth in the OECD

This research note examines the effect of the degree of decentralization of social protection expenditure on economic growth, using panel data for twenty Organization for Economic Co-operation and Development countries over the period 1990--2005. Our results show a positive impact of the subnational share of total government expenditure in social protection on economic performance. This finding is robust to the inclusion of additional explanatory variables in the analysis and is not driven by any specific country. Copyright 2011, Oxford University Press.