Table 1.

Description of variables.

Variables	Description	Source
ED	Expenditure decentralization (%)	OECD-UCLGa
EFb	Ethnic Fractionalization	[2]
EXP	Government Expenditure % of GDP	The Heritage Foundationc
FDI	Foreign direct investment, net inflows (% of GDP)	WB WDI 2017d
FEDe	Type of government (1 = federal, 0 = unitary)	SNG-WOFIf
GI	Government Integrity	The Heritage Foundation
INF	Inflation	WB WDI 2017
JE	Judicial Effectiveness	The Heritage Foundation
LogGDPPC	Natural logarithm of GDP per capita	WB WDI 2017
LogLND	Natural logarithm of Land area (millions of sq. km)	WB WDI 2017
LogPOP	Natural logarithm Population (millions)	WB WDI 2017
N_SNG	Total number of SNGs	SNG-WOFI
RD	Revenue decentralization (%)	OECD-UCLG
RFb	Religious Fractionalization	[2]
TR	Average Tax Rateg	The Heritage Foundation

^aOECD-UCLG World Observatory on Subnational Government Finance and Investment.

^bEF and RF for Eswatini are calculated based on data from Ref. [35] using the same equation as [2].

^cRef. [30].

^dWorld Development Indicators [46].

^eThis variable is a dummy variable, quasi-federal states such as South Africa are considered as federal states.

^fSNG-WOFI country and territory profiles.

^gThe average of individual income tax and corporate tax rates calculated by authors.