Fiscal Decentralization and Macroeconomic Stability : Theory and Evidence from Pakistan

The research on the relationship between fiscal decentralization and macroeconomic stability has been no results about the benefits of fiscal decentralization. The current paper is investigated the impact of fiscal decentralization on macroeconomic stability by using the misery index at country level for Pakistan. This study used secondary data covering the period of 1974 to 2013. Ordinary least square technique is used to estimate the impact of fiscal decentralization on macroeconomic stability. This study used the variables like GDP, Unemployment rate, Investment, Adjusted provincial revenue, Adjusted provincial expenditure. Macroeconomic stability is the dependent variable. This study shows that a significant and positive impact of fiscal decentralization on macroeconomic stability