This paper uses cross-national data for 21 OECD nations to examine whether
there is evidence of a connection between measures of political and fiscal
decentralization and the major, long-term, performance parameters of the po
st-war political economy. Findings of what is necessarily an exploratory an
alysis of a wide range of policy outcomes suggest that federalism and the p
roliferation of constitutional veto-points have inhibited the expansion of
the socially protective state and that a low level of fiscal centralization
appears to have restrained post-war inflationary pressures and gone along
with higher rates of post-war economic growth. No evidence is found to conn
ect either political or fiscal measures with postwar labour market performa
nce.