Income inequality has increased in many countries over recent decades, renewing interest in institutional and fiscal arrangements that may help reduce distributional disparities. Among these, fiscal decentralisation—broadly referring to how fiscal responsibilities are distributed across levels of government—has attracted growing policy attention. However, empirical evidence on its relationship with income inequality remains limited, particularly in cross-country settings where institutional heterogeneity and data limitations pose significant challenges. This paper examines the association between expenditure decentralisation and income inequality using a balanced panel of 59 countries over the period 1996–2019. In this study, fiscal decentralisation is proxiedby the share of subnational government expenditure in total public expenditure, while income inequality is measuredusing the Gini coefficient. To account for the slow-moving nature of fiscal and distributional variables and to mitigate short-term fluctuations and data gaps, key income and expenditure variables are constructed as five-year lagged averages. The empirical analysis employs panel data techniques, with model selection guided by the Hausman specification test. The baseline estimates are obtained using a random- effects generalized least squares (GLS) framework, controlling for per capita income, trade openness, government size, and regional fixed effects. The results consistently indicate a negative and statistically significant association between expenditure decentralisation and income inequality across alternative model specifications. Higher per capita income and larger government size are also associated with lower inequality, while greater trade openness is weakly associated with higher inequality. Decomposition of the goodness-of-fit measures reveals that the explanatory power of the model is driven primarily by cross-country variation rather than within-country changes over time, highlighting the importance of long-run structural and institutional differences across countries. While the analysis does not establish a causal relationship, the findings suggest that greater decentralisation of public expenditure responsibilities is systematically associated with lower income inequality in the long run. The results underscore the potential relevance of decentralised fiscal structures in shaping distributional outcomes and contribute to the ongoing debate on the equity implications of fiscal decentralisation in a global context.