abstract:

The paper, following an interdisciplinary approach between public economics and fiscal sociology as that pf Jürgen Backaus investigates the impact of fiscal decentralization on state fragility in the case of 10 EU excommunist countries, for the period 1995-2012, by using a panel model approach. The main results show that between state fragility and fiscal decentralization there is a nonlinear relationship, by cubic form, with inverted- U and U shapes. More precisely, there is a given level of fiscal decentralization which minimizes the state fragility. The main results show that between state fragility and fiscal decentralization there is a relationship with inverted-U and U shapes, analogous to the BARS (Barro, Armey, Rahn, and Scully) curve relating the government size to GDP growth. The inverted U curve relation holds also between the fragility curve and GDP growth as for the t BARS curve We also emphasise that, in these countries, the governments should stimulate state stability by maintaining a low level of revenues inequality and inflation rate, with high degree of urbanization. Special attention should be done to the democratization and political rights.