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Decentralization Of Social Protection Expenditure And Economic Growth In The OECD

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Executive Summary

This paper examines the effect of the degree of decentralization of social protection expenditure on economic growth, using panel data for twenty OECD countries over the period 1990-2005. The authors' 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. The relationship between expenditure in social protection - understood as expenditure in sickness and disability, old age, survivors, family and children, unemployment, housing, social exclusion, and other related types of expenditure - and economic growth has attracted considerable attention.

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