Fiscal Decentralisation and Economic Growth: A Bayesian Model Averaging Approach

This article re-examines the relationship between fiscal decentralisation and economic growth by employing Bayesian model averaging (BMA). BMA enables the consideration of a range of measures of fiscal decentralisation and allows the incorporation of model uncertainty into the empirical methodology. Posterior coefficient estimates suggest that not straightforward relationship exists between fiscal decentralisation and economic growth based on time-series data for Australia.