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In this paper we apply both cross-section and panel analysis to the relationship between fiscal and political decentralization and government quality. We find that fiscal decentralization improves government quality but not if it is accompanied by political decentralization. The negative impact of political decentralization on the relationship between fiscal decentralization and government quality persists when controlling for the degree of democratic maturity across countries.
Kyriacou et al. (Sat,) studied this question.