By employing endogenous growth model, panel data from 62 provinces and cities in 2000-2011, and PMG
and Arellano - Bond difference GMM, the research analyzes empirically the relationship between the fiscal policy and economic growth in Vietnam. Its main findings are: (i) fiscal decentralization and economic growth have a cointegration in the long term, but government's efforts to adjust its fiscal policy during economic shocks that make the economy deviate from its long-term trend only produced poor results
(ii) Income decentralization and fiscal support have positive effects on economic growth while expenditure decentralization does not
and (iii) Regular expenditure and spending on education, scientific research, health care and environmental issues produce positive effects on the economic growth while public investment fails to do so.