Fiscal decentralization and economic growth in Ecuador: Panel data on provincial council and municipalities since a heterodox vision

Abstract

The objective of the present investigation tries to determine the nature of relationship between fiscal decentralization and economic growth for Ecuadorian case from heterodox perspective. A panel data model is used, where the dependent variable being GDP pc (proxy for economic growth), and variables of interest and control (proxies of fiscal decentralization) are public investment, public consumption, the export ratio, poverty and inflation. The results indicate that greater fiscal decentralization affects economic growth, in which the public investment of the Decentralized Autonomous Governments (GADs) from the application of Organic Code of Territorial Organization, Autonomy and Decentralization (COOTAD) since 2010 has allowed its impact on the provincial GDP per capita to be stronger.