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Journal of Public Economics 91 (2007) 1197 – 1218 /locate/econbase Decentralization and the productive efficiency of ☆ government: Evidence from Swiss cantons Iwan Barankay a,⁎, Ben Lockwood b a CEPR, IZA and Department of Economics, University of Warwick, Coventry CV4 7AL, United Kingdom b CEPR and Department of Economics, University of Warwick, Coventry CV4 7AL, United Kingdom Received 23 July 2005; received in revised form 15 November 2006; accepted 20 November 2006 Available online 26 January 2007 Abstract Advocates of fiscal decentralization argue that among other benefits, it can increase the efficiency of delivery of government services. This paper is one of the first to evaluate this claim empirically by looking at the association between expenditure decentralization and the productive efficiency of government using a data set of Swiss cantons. We first provide careful evidence that expenditure decentralization is a powerful proxy for legal local autonomy. Further panel regressions of Swiss cantons provide robust evidence that more decentralization is associated with higher educational attainment. We also show that these gains lead to no adverse effects across education types but that male students benefited more from educational decentralization closing, for the Swiss case, the gender education gap. © 2006 Elsevier B.V. All rights reserved. JEL classification: H40; H52; H70; I20 Keywords: Decentralization; productive efficiency; local public goods ☆ We thank Imran Rasul, Michael Smart, Koleman Strumpf, Daniel Sturm, Alois Stutzer, the editor Sören Blomquist and two anon