Independent variables

Revenue decentralization

Expenditure decentralization

Average decentralization

(1)

(2)

(3)

(1)

(2)

(3)

(1)

(2)

(3)

GDP per capita (−1)

0.868***

(0.030)

0.878***

(0.031)

0.864***

(0.038)

0.897***

(0.026)

0.905***

(0.030)

0.894***

(0.036)

0.890***

(0.017)

0.896***

(0.029)

0.893***

(0.033)

Fiscal decentralization

10.875***

(3.450)

10.729***

(3.337)

8.699**

(4.258)

81.687*

(45.055)

95.622**

(47.639)

104.225**

(49.465)

10.610**

(4.965)

10.331**

(5.012)

13.065**

(6.489)

FDI

0.030***

(0.007)

0.038***

(0.009)

0.031***

(0.011)

0.062**

(0.028)

0.087***

(0.031)

0.092***

(0.032)

0.031***

(0.010)

0.031***

(0.011)

0.035***

(0.011)

Fiscal decen. * FDI

−0.010***

(0.003)

−0.010***

(0.003)

−0.008**

(0.003)

−0.081*

(0.045)

−0.095**

(0.047)

−0.103**

(0.049)

−0.010**

(0.004)

−0.009**

(0.004)

0.012**

(0.0061)

Govern. Investment

−0.509***

(0.178)

−0.598***

(0.192)

−0.414**

(0.202)

−0.979**

(0.386)

−1.255***

(0.415)

−1.234***

(0.434)

−0.492***

(0.157)

−0.484***

(0.160)

−0.386**

(0.184)

Labor force

0.181

(0.169)

0.242

(0.176)

0.220

(0.211)

−0.467

(0.297)

−0.344

(0.319)

−0.349

(0.325)

0.123

(0.149)

0.117

(0.150)

0.108

(0.193)

Trade openness

−0.029

(0.024)

−0.042

(0.026)

−0.029

(0.031)

−0.003

(0.032)

−0.029

(0.040)

−0.029

(0.038)

−0.034

(0.027)

−0.037

(0.030)

−0.039

(0.030)

Consumer price index

0.039

(0.023)

0.037

(0.023)

0.044

(0.027)

0.022

(0.026)

0.010

(0.029)

0.016

(0.030)

0.033

(0.021)

0.033

(0.021)

0.043

(0.027)

Infrastructure

−0.013

(0.010)

−0.004

(0.009)

−0.029

(0.018)

−0.031

(0.018)

−0.002

(0.009)

−0.005

(0.007)

Private investment

−0.298

(0.241)

−0.189

(0.229)

−0.203

(0.245)

Instrument

10

10

11

11

11

12

11

11

12

Province/observation

52/416

52/416

52/416

52/364

52/364

52/364

52/468

52/468

52/416

Sargan test (p-value)

0.597

0.392

0.691

0.264

0.760

0.629

0.644

0.442

0.234

Hansen test (p-value)

0.291

0.328

0.744

0.231

0.880

0.814

0.684

0.500

0.224

AR (2) test (p-value)

0.448

0.510

0.284

0.679

0.814

0.750

0.900

0.918

0.410