TY  - JOUR
AB  - Revenue stability has been an important policy objective for state government administrators. This study explores whether the effect of revenue diversification on revenue volatility varies in terms of the instability of a state’s economic base. To empirically answer the question, an econometric model that explores a series of factors that could affect revenue stability is estimated using panel data on 47 state governments during the years 1986-2004. The findings indicate that revenue diversification reduces revenue instability for states that are economically stable. However, the revenue-stabilizing effect of diversification diminishes as the economic instability of a state increases. Although revenue diversification has been advocated as a desirable practice for sub-national governments, this study indicates that the benefits of revenue diversification are not always clear and its practice should be moderated by the conditions of a state’s economic base.
VL  - 24
IS  - 1
SN  - 1096-3367
DO  - 10.1108/JPBAFM-24-01-2012-B003
UR  - https://doi.org/10.1108/JPBAFM-24-01-2012-B003
AU  - Yan Wenli
PY  - 2012
Y1  - 2012/01/01
TI  - The impact of revenue diversification and economic base on state revenue stability
T2  - Journal of Public Budgeting, Accounting & Financial Management
PB  - Emerald Publishing Limited
SP  - 58
EP  - 81
Y2  - 2024/04/25
ER  -