Abstract
This paper focusses on the relationship between subnational fiscal autonomy, transport infrastructure investment and regional disparities in 30 OECD countries over the period 1995-2011. Subnational fiscal autonomy is approximated by the revenue share of autonomous taxes. A fixed effects panel estimation reveals that SNG tax autonomy significantly contributes to regional convergence although its impact is small when compared to the effect of transport infrastructure investment. Subnational expenditure on education and economic affairs does not impact spatial disparities.
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