Showing papers on "Globalization published in 2013"

The Price of Inequality

Abstract: The top 1 percent of Americans control 40 percent of the nation's wealth. And, as Joseph E. Stiglitz explains, while those at the top enjoy the best health care, education, and benefits of wealth, they fail to realize that "their fate is bound up with how the other 99 percent live." Stiglitz draws on his deep understanding of economics to show that growing inequality is not inevitable: moneyed interests compound their wealth by stifling true, dynamic capitalism. They have made America the most unequal advanced industrial country while crippling growth, trampling on the rule of law, and undermining democracy. The result: a divided society that cannot tackle its most pressing problems. With characteristic insight, Stiglitz examines our current state, then teases out its implications for democracy, for monetary and budgetary policy, and for globalization. He closes with a plan for a more just and prosperous future.

MOOCs and open education: Implications for higher education

Abstract: This report sets out to help decision makers in higher education institutions gain a better understanding of the phenomenon of Massive Online Open Courses (MOOCs) and trends towards greater openness in higher education and to think about the implications for their institutions. The phenomena of MOOCs are described, placing them in the wider context of open education, online learning and the changes that are currently taking place in higher education at a time of globalisation of education and constrained budgets. The report is written from a UK higher education perspective, but is largely informed by the developments in MOOCs from the USA and Canada. A literature review was undertaken focussing on the extensive reporting of MOOCs through scholarly blogs, press releases as well as openly available reports and research papers. This identified current debates about new course provision, the impact of changes in funding and the implications for greater openness in higher education. The theory of disruptive innovation is used to help form the questions of policy and strategy that higher education institutions need to address

Globalization of Markets

Abstract: Globalization means the ability to produce and /or sell goods/services in global markets in open competition with others. Only the fittest will survive in open competition. There exists comprehensive foreign competition with respect to almost every product all over the world. The globalization of markets has vastly increased international competition. While pursuing the strategy of globalization, the firms have to face the challenges of managing human, technological, physical resources in the foreign markets. The globalization of markets and manufacturing has vastly increased international competition.

Inequality: What Can Be Done?

Abstract: Inequality is one of our most urgent social problems. Curbed in the decades after World War II, it has recently returned with a vengeance. We all know the scale of the problem talk about the 99% and the 1% is entrenched in public debate but there has been little discussion of what we can do but despair. According to the distinguished economist Anthony Atkinson, however, we can do much more than skeptics imagine.Atkinson has long been at the forefront of research on inequality, and brings his theoretical and practical experience to bear on its diverse problems. He presents a comprehensive set of policies that could bring about a genuine shift in the distribution of income in developed countries. The problem, Atkinson shows, is not simply that the rich are getting richer. We are also failing to tackle poverty, and the economy is rapidly changing to leave the majority of people behind. To reduce inequality, we have to go beyond placing new taxes on the wealthy to fund existing programs. We need fresh ideas. Atkinson thus recommends ambitious new policies in five areas: technology, employment, social security, the sharing of capital, and taxation. He defends these against the common arguments and excuses for inaction: that intervention will shrink the economy, that globalization makes action impossible, and that new policies cannot be afforded.More than just a program for change, Atkinson s book is a voice of hope and informed optimism about the possibilities for political action."

The Future as Cultural Fact: Essays on the Global Condition

Abstract: This major collection of essays, a sequel to Modernity at Large (1996), is the product of ten years' research and writing, constituting an important contribution to globalization studies. Appadurai takes a broad analytical look at the genealogies of the present era of globalization through essays on violence, commodification, nationalism, terror and materiality. Alongside a discussion of these wider debates, Appadurai situates India at the heart of his work, offering writing based on first-hand research among urban slum-dwellers in Mumbai, in which he examines their struggle to achieve equity, recognition and self-governance in conditions of extreme inequality. Finally, in his work on design, planning, finance and poverty, Appadurai embraces the "politics of hope" and lays the foundations for a revitalized, and urgent, anthropology of the future.

Trends in human fecal carriage of extended-spectrum β-lactamases in the community: toward the globalization of CTX-M.

Abstract: In the last 10 years, extended-spectrum β-lactamase-producing enterobacteria (ESBL-E) have become one of the main challenges for antibiotic treatment of enterobacterial infections, largely because of the current CTX-M enzyme pandemic. However, most studies have focused on hospitalized patients, though today it appears that the community is strongly affected as well. We therefore decided to devote our investigation to trends in ESBL-E fecal carriage rates and comprehensively reviewed data from studies conducted on healthy populations in various parts of the world. We show that (i) community ESBL-E fecal carriage, which was unknown before the turn of the millennium, has since increased significantly everywhere, with developing countries being the most affected; (ii) intercontinental travel may have emphasized and globalized the issue; and (iii) CTX-M enzymes, especially CTX-M-15, are the dominant type of ESBL. Altogether, these results suggest that CTX-M carriage is evolving toward a global pandemic but is still insufficiently described. Only a better knowledge of its dynamics and biology will lead to further development of appropriate control measures.

World-Systems Analysis

Abstract: In World-Systems Analysis , Immanuel Wallerstein provides a concise and accessible introduction to the comprehensive approach that he pioneered thirty years ago to understanding the history and development of the modern world. Since Wallerstein first developed world-systems analysis, it has become a widely utilized methodology within the historical social sciences and a common point of reference in discussions of globalization. Now, for the first time in one volume, Wallerstein offers a succinct summary of world-systems analysis and a clear outline of the modern world-system, describing the structures of knowledge upon which it is based, its mechanisms, and its future. Wallerstein explains the defining characteristics of world-systems analysis: its emphasis on world-systems rather than nation-states, on the need to consider historical processes as they unfold over long periods of time, and on combining within a single analytical framework bodies of knowledge usually viewed as distinct from one another—such as history, political science, economics, and sociology. He describes the world-system as a social reality comprised of interconnected nations, firms, households, classes, and identity groups of all kinds. He identifies and highlights the significance of the key moments in the evolution of the modern world-system: the development of a capitalist world-economy in the sixteenth-century, the beginning of two centuries of liberal centrism in the French Revolution of 1789, and the undermining of that centrism in the global revolts of 1968. Intended for general readers, students, and experienced practitioners alike, this book presents a complete overview of world-systems analysis by its original architect.

The Political Economy of Regionalism

Abstract: The strength of the book lies not only in the breadth of material, but in the juxtaposition of different viewpoints and examples, al making connections between cultural, political, institutional and territorial contexts Town Planning Review Regional and Federal Studies 1997 "This book is necessary reading for students of globalization searching for ways to unpack this abstract concept" European Planning Studies - reviewed by Deron Ferguson - Uni of Washington "This collection represents a substantial resource for anyone interested in "the regional question" "anyone interested in regionalism will likely find several chapters of interest, or more, in this volume" Space and Polity, Vol 2, No 2 1998 - Reviewed by Donald McNeill - "there is undoubtedly a lot here of meritthe book should serve as a useful reference work for those seeking background on regional developments in various parts of the world" Urban Studies, Vol 35, No 2, 1998 "Certainly the volume provides ample evidence of the diversity of the regional question and of the responses to it, and there is much here to enlighten our understanding" Tijdschrift voor Economische en Sociale Geografie, Vol 91, No 1, 2000 "I would strongly recommend this volume for advanced classes and seminars on place, territory and identity regionalism in a post cold war world contemporary political Europe and regionalism and international relations I would encourage the editors to continue their research on this important topic and I hope the publisher will continue its commitment to publishing cutting-edge geopolitical and political economy research" Royal Dutch Geographical Society "I would strongly recommend this volume for advanced classes and seminars on place, territory and identity: regionalism in a post cold war world: contemporary political Europe: and regionalism and international relations" "Cutting Edge

Globalization, Climate Change, and Human Health

Abstract: Climate change affects the range of pathogens and temperatures to which populations are exposed. This article reviews the nature of these changes and explores how efforts to mitigate climate change could be of value to the global community.

An Avalanche Is Coming. Higher Education and the Revolution Ahead

Abstract: Michael Barber, Professor, Chief Adviser to the Secretary of State for Education on School Standards (1997-2001), chief education advisor at Pearson, leading Pearson’s worldwide programme of research into education policy and the impact of its products and services on learner outcomes, London, UK. Email: krdonnelly@pearson.com Address: Institute for Public Policy Research, 4th Floor, 14 Buckingham Street, London WC2N 6DF, UK.Katelyn Donnelly, executive director at Pearson where she leads the Affordable Learning Fund, London, UK. Email: krdonnelly@pearson.com Address: Institute for Public Policy Research, 4th Floor, 14 Buckingham Street, London WC2N 6DF, UK.Saad Rizvi, Ph.D. in Economics and International Relations, Pearson’s executive director of efficacy, London, UK. Email: krdonnelly@pearson.com Address: Institute for Public Policy Research, 4th Floor, 14 Buckingham Street, London WC2N 6DF, UK.Prospects for higher education are discussed in the context of technologies and globalization sweeping over the world and affecting many of the world economy sectors. The report describes opportunities that will appear ahead of universities if they go for radical transformations in their key institutions, and analyzes the risks that may arise if such transformations lose to the challenges of the 21st century.The model of a traditional 21st century university and its functions are characterized. The authors examine the factors that can radically change the paradigm of a traditional university and points out that universities need to revise their existing business models and education patterns. Marketization of education has turned students into consumers dictating their own terms and has brought about a number of alternatives to universities for talented students. Therefore, universities need to define clearly what they can offer, differentiate themselves from competitors, and identify their target audience among potential student groups.The authors believe that universities of the future should rearrange functions performed by the existing universities. He also explains why the model of the future is more efficient than the existing one.It is supposed that the promising prospects proposed for higher education by the 21st century can only be reached if all players of the HE system, from students to the government, support the radical transformation initiative to tackle the challenges they are facing. The study defines the essential questions that all players should answer if they want a productive transformation in higher education.

Rising Income Inequality: Technology, or Trade and Financial Globalization?

Abstract: The paper examines the relationship between the rapid pace of trade and financial globalization and the rise in income inequality observed in most countries over the past two decades. Using a newly compiled panel of 51 countries over a 23-year period from 1981 to 2003, the paper reports estimates that support a greater impact of technological progress than globalization on inequality. The limited overall impact of globalization reflects two offsetting tendencies: whereas trade globalization is associated with a reduction in inequality, financial globalization—and foreign direct investment in particular—is associated with an increase in inequality.

Late Neoliberalism: The Financialization of Homeownership and Housing Rights

Abstract: Over the last few decades we have witnessed a global U-turn in prevailing housing and urban policy agendas, spread around the world by the driving forces of globalization and neoliberalism The new paradigm was mainly based on the withdrawal of states from the housing sector and the implementation of policies designed to create stronger and larger market-based housing finance models The commodification of housing, together with the increased use of housing as an investment asset within a globalized financial market, has profoundly affected the enjoyment of the right to adequate housing Taking the World Bank's 1993 manifesto as a starting point and the subprime crisis as its first great international flashpoint, this essay traces some key elements of the neoliberal approach to housing and its impact on the enjoyment of the right to housing in different contexts and times The reform of housing policy — with all its components of homeownership, private property and binding financial commitments — has been central to the political and ideological strategies through which the dominance of neoliberalism is maintained Conversely, the crisis (and its origins in the housing market) reflects the inability of market mechanisms to provide adequate and affordable housing for all

Neoliberalism as language policy

Abstract: This article explores how an economic ideology—neoliberalism—serves as a covert language policy mechanism pushing the global spread of English. Our analysis builds on a case study of the spread of English as a medium of instruction (MoI) in South Korean higher education. The Asian financial crisis of 1997/98 was the catalyst for a set of socioeconomic transformations that led to the imposition of “competitiveness” as a core value. Competition is heavily structured through a host of testing, assessment, and ranking mechanisms, many of which explicitly privilege English as a terrain where individual and societal worth are established. University rankings are one such mechanism structuring competition and constituting a covert form of language policy. One ranking criterion—internationalization—is particularly easy to manipulate and strongly favors English MoI. We conclude by reflecting on the social costs of elevating competitiveness to a core value enacted on the terrain of language choice. (English as a global language, globalization, higher education, medium of instruction (MoI), neoliberalism, South Korea, university rankings)*

Outsourcing Economics: Global Value Chains in Capitalist Development

Abstract: Outsourcing Economics has a double meaning. First, it is a book about the economics of outsourcing. Second, it examines the way that economists have understood globalization as a pure market phenomenon, and as a result have 'outsourced' the explanation of world economic forces to other disciplines. Markets are embedded in a set of institutions - labor, government, corporate, civil society, and household - that mold the power asymmetries that influence the distribution of the gains from globalization. In this book, William Milberg and Deborah Winkler propose an institutional theory of trade and development starting with the growth of global value chains - international networks of production that have restructured the global economy and its governance over the past twenty-five years. They find that offshoring leads to greater economic insecurity in industrialized countries that lack institutions supporting workers. They also find that offshoring allows firms to reduce domestic investment and focus on finance and short-run stock movements.

Mapping world cultures: Cluster formation, sources and implications

Abstract: This paper extends and builds on Ronen and Shenkar’s synthesized cultural clustering of countries based on similarity and dissimilarity in work-related attitudes. The new map uses an updated dataset, and expands coverage to world areas that were non-accessible at the time. Cluster boundaries are drawn empirically rather than intuitively, and the plot obtained is triple nested, indicating three levels of similarity across given country pairs. Also delineated are cluster adjacency and cluster cohesiveness, which vary from the highly cohesive Arab and Anglo clusters to the least cohesive Confucian and Far Eastern clusters. Exploring predictors of cluster formation, we draw on the ecocultural perspective and other inputs, and examine the combined role of language, religion, and geography in generating cluster formation. We find that these forces play a prominent yet complex role: for instance, the religion and language brought by the Spanish fail to create a singular, cohesive Latin American cluster akin to the Anglo cluster. The role of economic variables is similarly considered. Finally, comparing the current map with that of 1985, we find strong support for the divergence (vs convergence) argument. Implications for international business are delineated.

Tele-connecting local consumption to global land use

Abstract: Globalization increases the interconnectedness of people and places around the world. In a connected world, goods and services consumed in one country are often produced in other countries and exchanged via international trade. Thus, local consumption is increasingly met by global supply chains oftentimes involving large geographical distances and leading to global environmental change. In this study, we connect local consumption to global land use through tracking global commodity and value chains via international trade flows. Using a global multiregional input–output model with sectoral detail allows for the accounting of land use attributed to “unusual” sectors – from a land use perspective – including services, machinery and equipment, and construction. Our results show how developed countries consume a large amount of goods and services from both domestic and international markets, and thus impose pressure not only on their domestic land resources, but also displace land in other countries, thus displacing other uses. For example, 33% of total U.S. land use for consumption purposes is displaced from other countries. This ratio becomes much larger for the EU (more than 50%) and Japan (92%). Our analysis shows that 47% of Brazilian and 88% of Argentinean cropland is used for consumption purposes outside of their territories, mainly in EU countries and China. In addition, consumers in rich countries tend to displace land by consuming non-agricultural products, such as services, clothing and household appliances, which account for more than 50% of their total land displacement. By contrast, for developing economies, such as African countries, the share of land use for non-agricultural products is much lower, with an average of 7%. The emerging economies and population giants, China and India, are likely to further increase their appetite for land from other countries, such as Africa, Russia and Latin America, to satisfy their own land needs driven by their fast economic growth and the needs and lifestyles of their growing populations.

Just Business: Multinational Corporations and Human Rights

Abstract: One of the most vexing human rights issues of our time has been how to protect the rights of individuals and communities worldwide in an age of globalization and multinational business. Indeed, from Indonesian sweatshops to oil-based violence in Nigeria, the challenges of regulating harmful corporate practices in some of the world's most difficult regions long seemed insurmountable. Human rights groups and businesses were locked in a stalemate, unable to find common ground. In 2005, the United Nations appointed John Gerard Ruggie to the modest task of clarifying the main issues. Six years later, he had accomplished much more than that. Ruggie had developed his now-famous "Guiding Principles on Business and Human Rights," which provided a road map for ensuring responsible global corporate practices. The principles were unanimously endorsed by the UN and embraced and implemented by other international bodies, businesses, governments, workers' organizations, and human rights groups, keying a revolution in corporate social responsibility. Just Business tells the powerful story of how these landmark "Ruggie Rules" came to exist. Ruggie demonstrates how, to solve a seemingly unsolvable problem, he had to abandon many widespread and long-held understandings about the relationships between businesses, governments, rights, and law, and develop fresh ways of viewing the issues. He also takes us through the journey of assembling the right type of team, of witnessing the severity of the problem firsthand, and of pressing through the many obstacles such a daunting endeavor faced. Just Business is an illuminating inside look at one of the most important human rights developments of recent times. It is also an invaluable book for anyone wanting to learn how to navigate the tricky processes of global problem-solving and consensus-building and how to tackle big issues with ambition, pragmatism, perseverance, and creativity.

Aid on the Edge of Chaos: Rethinking International Cooperation in a Complex World

Abstract: Preface: Globalization, Development, and Complexity PART 1: THE WAY AID WORKS 1. A System to Change 'The System'? 2. Thinking Inside the Box 3. Strategic Mismanagement 4. The Goats in the Machine 5. Watching the Watchmen 6. Part 1 Epilogue-The Trouble with Physics Envy PART 2: THE WAY THE WORLD WORKS 7. Introducing Complexity 8. More Than, and Different To, The Parts 9. The Madness of Men 10. Falling Off Cliffs 11. The Devil is in the Dynamics 12. Part 2 Epilogue--What Lies Between Order and Chaos? PART 3: THE WAY AID COULD WORK 13. From Bali, with Complexity 14. Systemic Learning 15. Adaptive Strategies 16. Networked Organizations 17. Dynamic Change 18. Part 3 Epilogue--Beyond Panaceas 19. Aid on the Edge of Chaos

A model of global citizenship: Antecedents and outcomes

Abstract: As the world becomes increasingly interconnected, exposure to global cultures affords individuals opportunities to develop global identities. In two studies, we examine the antecedents and outcomes of identifying with a superordinate identity—global citizen. Global citizenship is defined as awareness, caring, and embracing cultural diversity while promoting social justice and sustainability, coupled with a sense of responsibility to act. Prior theory and research suggest that being aware of one's connection with others in the world (global awareness) and embedded in settings that value global citizenship (normative environment) lead to greater identification with global citizens. Furthermore, theory and research suggest that when global citizen identity is salient, greater identification is related to adherence to the group's content (i.e., prosocial values and behaviors). Results of the present set of studies showed that global awareness (knowledge and interconnectedness with others) and one's normative ...

Land Grabbing and Global Governance: Critical Perspectives

Abstract: Land grabbing has emerged as a significant issue in contemporary global governance that cuts across the fields of development, investment, food security, among others. Whereas land grabbing per se is not a new phenomenon, having historical precedents in the era of imperialism, the character, scale, pace, orientation, and key drivers of the recent wave of land grabs is a distinct historical phenomenon closely tied to major shifts in power and production in the global political economy. Land grabbing is facilitated by ever greater flows of capital, goods, and ideas across borders, and these flows occur through axes of power that are far more polycentric than the North–South imperialist tradition. In this introduction we argue that land grabbing speaks to many of the core questions of globalization studies. However, we note scholars of globalization have yet to deeply engage with this new field. We situate land grabbing in an era of advanced capitalism, multiple global crises, and the role of new configurati...

Global Income Inequality in Numbers: in History and Now

Abstract: article presents an overview of calculations of global inequality, recently and over the long term, and outlines the main controversies and political and philosophical implications of the findings. It focuses in particular on the winners and losers of the most recent episode of globalization, from 1988 to 2008. It suggests that the period has witnessed the first decline in inequality between world citizens since the Industrial Revolution. However, the decline can be sus- tained only if countries' mean incomes continue to converge (as they have been doing during the past ten years) and if internal (within-country) inequalities, which are already high, are kept in check. Mean-income convergence would also reduce the huge 'citizenship premium' that is enjoyed today by the citizens of rich countries.

Modern regional innovation policy

Abstract: This paper analyses the evolution of regional innovation policy into the mainstream of public policy. The paper examines the empirical and theoretical developments which have shifted much of the focus on innovation-related issues to matters of economic geography. As well as academic material we also review the literature on the subject produced by the international development institutions. In terms of policy, special attention is devoted to the role of local market failures and local institutions in explaining the importance and need for regional innovation policies, and the advent of the smart specialisation agenda is discussed. Finally, the paper discusses the current regional innovation policy tools and interventions observed around the world, which are seen by international institutions as examples of best practice.

The Economic Performance of European Cities and City Regions: Myths and Realities

Abstract: The ever-increasing concentration of people and economic growth in the largest cities relative to the rest of the country has slowed down or even reversed in many of the developed European countries over the last decade. This trend contradicts what the global cities, urban economics and new economic geography literature would predict. This trend can be interpreted from two points of view: (1) the trend is due to large obstacles to further large city urbanization and thus is inefficient or (2) this trend highlights alternative pathways to growth than the mega-city approach and may be as, if not more, efficient. This trend may be linked to Europe's uniquely polycentric urban structure with high number of small- and medium-sized cities. In addition, improvements in the access to services, including broadband, outside large cities may have facilitated the higher growth rates of smaller centres and rural regions and increased their appeal for residents and firms. Last but not least, negative externalities in t...

Trade and the Environment

Abstract: During the last few decades there has been growing recognition and concern about the effects of the economy on the natural environment. There has also been a significant increase in the integration of the international economy. As the international trade regime has grown in complexity and visibility via the evolution of the General Agreement on Tariffs and Trade (GATT) into the World Trade Organization (WTO) and a wave of bilateral and regional free trade agreements, the interaction between globalization and the environment has become an important issue on the policy agenda.

The Agency of Children: From Family to Global Human Rights

Abstract: In the growing field of childhood studies, the idea of children’s agency is central. In the backdrop of the transformation of children and childhood across the nineteenth and twentieth centuries and in the context of dramatic changes in recent years to children’s everyday lives as a consequence of new networked, mobile technologies and new forms of globalisation, this book argues for new understandings of children’s agency. This book reviews existing theories of children’s agency, but it also provides the theoretical tools for thinking children’s agency as spatially, temporally and materially complex. With this in mind, the book surveys the main problem-spaces of childhood studies, including chapters on family, schooling, crime, health, consumer culture, work and human rights. This comprehensive text leads the field and is intended for students and academic researchers from across the humanities and social sciences interested in the study of children and childhood.

Precarious, Informalizing, and Flexible Work Transforming Concepts and Understandings

Abstract: There is a considerable body of academic and activist research that studies the prevalence of precariousness in contemporary societies. It goes by many names that are often interchangeable, including precarious work, precarity, informalization, and casualization. These are typically rooted in emerging theories of labor and work that temporally correspond to the globalization of production, distribution, and consumption in the neoliberal era. This article examines new ways of looking at the global economic system as a whole while focusing on the diverse experiences associated with precarious work. We address prominent social movements and scholarly responses to changes in work and life, including transforming politics and policy initiatives.

Fiscal decentralization and economic growth: spending versus revenue decentralization

Abstract: I. INTRODUCTION Fiscal decentralization (hereafter: FD) is a political economy trend in both developing and developed countries. According to the World Bank (1999), some 95% of democracies now have elected subnational governments, and countries everywhere are devolving political, fiscal, and administrative powers to subnational tiers of government below the national level. In developed countries the United States, the United Kingdom, and Canada have revived debates on FD or devolution (Xie, Zou, and Davoodi 1999). In recent years, the U.S. Congress has been contemplating how to devolve more expenditure responsibility to State and local governments. FD has also become a key issue in Japan because the law for the promotion of fiscal decentralization was enacted in 1995. These efforts at devolution in a number of Organization for Economic Co-operation and Development (OECD) countries are accompanied by the emergence of a new top layer of government in the European Union (EU). Stegarescu (2009) finds that European integration has favored the fiscal decentralization process by increasing market size and the benefits of decentralized provision of public goods in accordance with comparative advantage and the inter-regional division of labor. The rise of the regional level of government in Spain, Belgium, Italy, France, and the United Kingdom are examples of this decentralization process in the EU. The movement toward FD is often justified by the widespread belief that it is an effective tool for increasing the efficiency of public expenditures and competition among subnational governments in delivering public services. This may also be a reaction to the failure of large centralized bureaucracies in developing and transitional countries (Martinez-Vazquez and McNab 2003). The World Bank (1999), for example, has argued that alongside globalization, localization--the increasing demand for local autonomy--is the main force shaping the world in the first decade of the twenty-first century. In this article, we focus on a specific debate in the FD literature--namely that it improves economic growth performance. We summarize a number of the relevant arguments in Section II, and then review the existing empirical evidence on the FD-growth relationship in Section III. We argue that the existing literature is deficient in a number of respects, for example by rarely testing simultaneously for revenue and expenditure decentralization. Section IV presents our data and empirical methodology, and Section V tests for an effect of FD on economic growth rates in OECD countries over the period 1972-2005. Section VI checks the robustness of our findings to alternative econometric techniques to deal with endogeneity, and alternative measures of fiscal decentralization. Section VII summarizes the main conclusions. II. ARGUMENTS FOR AND AGAINST FISCAL DECENTRALIZATION The basic argument in favor of fiscal decentralization is that it improves the efficiency of the public sector and promotes long-term economic development (Oates 1972). The mainstream theory of fiscal federalism, referred to by Oates (2005) as "first-generation" theory argues that decentralization enhances economic efficiency because local governments have better knowledge of local conditions and preferences in the provision of public goods than national governments due to their physical and institutional proximity. These informational advantages allow local governments to deliver public goods and services that better match local preferences and/or deliver the same public goods and services at lower cost. These arguments are reinforced where public good characteristics are local in nature (e.g., sharing economies or nonexcludability aspects are geographically restricted). The first-generation theory contends that if some local outputs can produce inter-jurisdictional spillover effects, then central governments should provide matching grants to decentralized government that would internalize the benefits. …