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Do formula-based intergovernmental transfer mechanisms eliminate politically motivated targeting? Evidence from Ghana

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  • Banful, Afua Branoah

Abstract

Various countries have adopted formulas for determining intergovernmental transfers as a strategy to limit the role of political considerations in resource allocation. In this paper, we investigate a formula-based system of allocating resources from a central government to local governments to determine whether the political characteristics of recipient areas have any bearing on their allocation. Specifically, we study the sharing of resources of the District Assemblies Common Fund (DACF) in Ghana amongst the country's district governments over the period 1994 to 2005. We find evidence that the mechanism does not eliminate politically motivated targeting of the grants. Per capita DACF grants were higher in districts where vote margins in the previous presidential election were lower, suggesting that swing districts were targeted. We find evidence that DACF formula indicators and their weighting were chosen and amended to produce politically desired patterns of transfers.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 96 (2011)
Issue (Month): 2 (November)
Pages: 380-390

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Handle: RePEc:eee:deveco:v:96:y:2011:i:2:p:380-390

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Web page: http://www.elsevier.com/locate/devec

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Keywords: Intergovernmental transfers Political economy Resource sharing formula;

References

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Citations

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Cited by:
  1. Pierre André & Sandrine Mesplé-Somps, 2013. "Sitting on the fence: Pork-barrels and democratization under threat of conflict. The case of Ghana, 1996 - 2004," THEMA Working Papers 2013-24, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  2. André, Pierre & Mesplé-Somps, Sandrine, 2011. "Politics and the geographic allocation of public funds in a semi-democracy: The case of Ghana, 1996-2004," Proceedings of the German Development Economics Conference, Berlin 2011 6, Verein für Socialpolitik, Research Committee Development Economics.
  3. Mogues, Tewodaj & Benin, Samuel, 2012. "Do External Grants to District Governments Discourage Own Revenue Generation? A Look at Local Public Finance Dynamics in Ghana," World Development, Elsevier, vol. 40(5), pages 1054-1067.
  4. Emilie Caldeira, 2012. "Does the System of Allocation of Intergovernmental Transfers in Senegal Eliminate Politically Motivated Targeting?," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 21(2), pages 167-191, March.
  5. Mesplé-Somps, Sandrine & André, Pierre, 2011. "The Allocation of Public Goods and National Elections in Ghana," Economics Papers from University Paris Dauphine 123456789/12069, Paris Dauphine University.
  6. Boakye, Daniel & Dessus, Sebastien & Foday, Yusuf & Oppong, Felix, 2012. "Investing mineral wealth in development assets : Ghana, Liberia and Sierra Leone," Policy Research Working Paper Series 6089, The World Bank.
  7. Renkow, Mitch, 2010. "Impacts of IFPRI's "priorities for pro-poor public investment" global research program:," Impact assessments 31, International Food Policy Research Institute (IFPRI).

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