This article reviews and redirects the cross-country empirical literature on the causes and consequences of decentralization and federalism. A "first generation" of studies viewed decentralization as a simple zero-sum transfer of authority from the center to subnational governments, drew upon the assumptions of welfare economics and public choice theory, and employed blunt measures of expenditure decentralization and federalism. By defining several alternative forms of federalism and fiscal, policy, and political decentralization, then measuring them and exploring inter-relationships across countries and over time, this paper paints more detailed pictures of decentralization and federalism that help explain the growing disjuncture between theory and cross-national evidence, pointing the way toward a "second generation" of more nuanced empirical work that takes politics and institutions seriously.
federalism; fiscal decentralization; political decentralization; policy decentralization
