IDEAS home Printed from https://ideas.repec.org/a/eee/jcecon/v45y2017i1p110-118.html
   My bibliography  Save this article

Government decentralization as a commitment in non-democracies

Author

Listed:
  • Gradstein, Mark

Abstract

In the past several decades, many countries, among them non-democratic, chose to decentralize their governments. One prominent and well researched example is China's decentralization in 1980–1990s. This paper proposes a rationale to account for a voluntary devolution of centralized power by a non-democratic ruler through decentralization. The idea is that decentralization serves as a commitment device to ensure that ex post chosen policies reflect regional preferences, thereby boosting individual productive effort incentives, hence tax revenues used to provide national public goods. Thus, it helps to overcome the holdup problem, enhancing efficiency and possibly benefitting the non-democratic ruler.

Suggested Citation

  • Gradstein, Mark, 2017. "Government decentralization as a commitment in non-democracies," Journal of Comparative Economics, Elsevier, vol. 45(1), pages 110-118.
    • Handle: RePEc:eee:jcecon:v:45:y:2017:i:1:p:110-118
    DOI: 10.1016/j.jce.2016.01.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0147596716000068
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jce.2016.01.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Khemani, Stuti, 2007. "Does delegation of fiscal policy to an independent agency make a difference? Evidence from intergovernmental transfers in India," Journal of Development Economics, Elsevier, vol. 82(2), pages 464-484, March.
    2. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Reserving Market Incentives," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 83-92, Fall.
    3. Martinez-Vazquez, Jorge & McNab, Robert M., 2003. "Fiscal Decentralization and Economic Growth," World Development, Elsevier, vol. 31(9), pages 1597-1616, September.
    4. Daron Acemoglu & James A. Robinson, 2008. "Persistence of Power, Elites, and Institutions," American Economic Review, American Economic Association, vol. 98(1), pages 267-293, March.
    5. Shah, Anwar, 2004. "Fiscal decentralization in developing and transition economies: progress, problems, and the promise," Policy Research Working Paper Series 3282, The World Bank.
    6. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1243-1284.
    7. Chunli Shen & Jing Jin & Heng-fu Zou, 2012. "Fiscal Decentralization in China: History, Impact, Challenges and Next Steps," Annals of Economics and Finance, Society for AEF, vol. 13(1), pages 1-51, May.
    8. Pranab Bardhan & Dilip Mookherjee, 2006. "Decentralisation and Accountability in Infrastructure Delivery in Developing Countries," Economic Journal, Royal Economic Society, vol. 116(508), pages 101-127, January.
    9. Matteo Cervellati & Piergiuseppe Fortunato & Uwe Sunde, 2008. "Hobbes to Rousseau: Inequality, Institutions and Development," Economic Journal, Royal Economic Society, vol. 118(531), pages 1354-1384, August.
    10. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    11. Mark Gradstein, 2008. "Institutional Traps And Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(3), pages 1043-1066, August.
    12. Justin Yifu Lin & Zhiqiang Liu, 2000. "Fiscal Decentralization and Economic Growth in China," Economic Development and Cultural Change, University of Chicago Press, vol. 49(1), pages 1-21.
    13. Mark Gradstein, 2007. "Inequality, democracy and the protection of property rights," Economic Journal, Royal Economic Society, vol. 117(516), pages 252-269, January.
    14. Zhang, Xiaobo & Fan, Shenggen & Zhang, Linxiu & Huang, Jikun, 2004. "Local governance and public goods provision in rural China," Journal of Public Economics, Elsevier, vol. 88(12), pages 2857-2871, December.
    15. Timothy Besley & Rohini Pande & Vijayendra Rao, 2005. "Participatory Democracy in Action: Survey Evidence from South India," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 648-657, 04/05.
    16. Philip Keefer, 2007. "Clientelism, Credibility, and the Policy Choices of Young Democracies," American Journal of Political Science, John Wiley & Sons, vol. 51(4), pages 804-821, October.
    17. Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
    18. Joanis, Marcelin, 2014. "Shared accountability and partial decentralization in local public good provision," Journal of Development Economics, Elsevier, vol. 107(C), pages 28-37.
    19. Seabright, Paul, 1996. "Accountability and decentralisation in government: An incomplete contracts model," European Economic Review, Elsevier, vol. 40(1), pages 61-89, January.
    20. Weingast, Barry R., 1997. "The Political Foundations of Democracy and the Rule of the Law," American Political Science Review, Cambridge University Press, vol. 91(2), pages 245-263, June.
    21. Bertocchi, Graziella & Spagat, Michael, 2001. "The Politics of Co-optation," Journal of Comparative Economics, Elsevier, vol. 29(4), pages 591-607, December.
    22. Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, vol. 89(4), pages 705-727, April.
    23. Bardhan, Pranab & Mookherjee, Dilip, 2005. "Decentralizing antipoverty program delivery in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 675-704, April.
    24. Cai, Hongbin & Treisman, Daniel, 2004. "State corroding federalism," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 819-843, March.
    25. John William Hatfield & Gerard Padró i Miquel, 2012. "A Political Economy Theory Of Partial Decentralization," Journal of the European Economic Association, European Economic Association, vol. 10(3), pages 605-633, May.
    26. Albornoz, Facundo & Cabrales, Antonio, 2013. "Decentralization, political competition and corruption," Journal of Development Economics, Elsevier, vol. 105(C), pages 103-111.
    27. Weingast, Barry R., 2009. "Second generation fiscal federalism: The implications of fiscal incentives," Journal of Urban Economics, Elsevier, vol. 65(3), pages 279-293, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Bartolini & Agnese Sacchi & Domenico Scalera & Alberto Zazzaro, 2023. "Voters’ Distance, Information Bias and Politicians’ Salary," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(2), pages 637-664, July.
    2. Flamand, Sabine, 2019. "Partial decentralization as a way to prevent secessionist conflict," European Journal of Political Economy, Elsevier, vol. 59(C), pages 159-178.
    3. Chen, Shaoling & Gao, Qing & Peng, Qing & Yang, Haisheng, 2021. "Government-decentralized power: Measurement and effects," Emerging Markets Review, Elsevier, vol. 48(C).
    4. Tiangboho Sanogo, 2019. "Does fiscal decentralization enhance citizens’ access to public services and reduce poverty? Evidence from Côte d’Ivoire municipalities in a conflict setting," Post-Print hal-01875189, HAL.
    5. Sanogo, Tiangboho, 2019. "Does fiscal decentralization enhance citizens’ access to public services and reduce poverty? Evidence from Côte d’Ivoire municipalities in a conflict setting," World Development, Elsevier, vol. 113(C), pages 204-221.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mark Gradstein, 2014. "Government Decentralization as a Commitment," CESifo Working Paper Series 4809, CESifo.
    2. Kis-Katos, Krisztina & Sjahrir, Bambang Suharnoko, 2017. "The impact of fiscal and political decentralization on local public investment in Indonesia," Journal of Comparative Economics, Elsevier, vol. 45(2), pages 344-365.
    3. Emilie Caldeira & Martial Foucault & Grégoire Rota-Graziosi, 2014. "Does Decentralization Facilitate Access to Poverty-Related Services? Evidence from Benin," NBER Chapters, in: African Successes, Volume I: Government and Institutions, pages 57-102, National Bureau of Economic Research, Inc.
    4. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
    5. repec:hal:spmain:info:hdl:2441/7o52iohb7k6srk09ni5kl0m3m is not listed on IDEAS
    6. Tristan Canare, 2021. "Decentralization and Development Outcomes: What Does the Empirical Literature Really Say?," Hacienda Pública Española / Review of Public Economics, IEF, vol. 237(2), pages 111-151, June.
    7. Ivar Kolstad & Arne Wiig & Vincent Somville, 2014. "Devolutionary delusions? The effect of decentralization on corruption," CMI Working Papers 10, CMI (Chr. Michelsen Institute), Bergen, Norway.
    8. Grégoire ROTA-GRAZIOSI & Emilie CALDEIRA, 2014. "La décentralisation dans les pays en développement : une revue de la littérature - Decentralization in developing countries: A literature review," Working Papers 201411, CERDI.
    9. Sjahrir, Bambang Suharnoko & Kis-Katos, Krisztina & Schulze, Günther G., 2014. "Administrative Overspending in Indonesian Districts: The Role of Local Politics," World Development, Elsevier, vol. 59(C), pages 166-183.
    10. Pranab Bardhan, 2016. "State and Development: The Need for a Reappraisal of the Current Literature," Journal of Economic Literature, American Economic Association, vol. 54(3), pages 862-892, September.
    11. Tristan Canare, 2022. "Decentralization and welfare: Evidence from a panel of countries," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(3), pages 767-796, September.
    12. Keith Blackburn & Gareth Downing, 2015. "Deconcentration, Corruption and Economic Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 209, Economics, The University of Manchester.
    13. Mu, Ren & Zhang, Xiaobo, 2011. "The role of elected and appointed village leaders in the allocation of public resources: Evidence from a low-income region in China," IFPRI discussion papers 1061, International Food Policy Research Institute (IFPRI).
    14. Mu, Ren & Zhang, Xiaobo, 2014. "Do elected leaders in a limited democracy have real power? Evidence from rural China," Journal of Development Economics, Elsevier, vol. 107(C), pages 17-27.
    15. Pranab Bardhan & Dilip Mookherjee, 2005. "Decentralization, Corruption and Government Accountability: An Overview," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-152, Boston University - Department of Economics.
    16. Emilie Caldeira & Grégoire Rota-Graziosi, 2015. "La décentralisation dans les pays en développement : une revue de la littérature - Decentralization in developing countries: A literature review," CERDI Working papers halshs-01005204, HAL.
    17. Li, Lei & Luo, Changtuo, 2023. "Does administrative decentralization promote outward foreign direct investment and productivity? Evidence from China," Economic Modelling, Elsevier, vol. 124(C).
    18. Tiwari, Smriti, 2017. "Does Local Development Influence Outmigration Decisions? Evidence from Indonesia," World Development, Elsevier, vol. 93(C), pages 108-124.
    19. Che, Jiahua & Chung, Kim-Sau & Lu, Yang K., 2017. "Decentralization and political career concerns," Journal of Public Economics, Elsevier, vol. 145(C), pages 201-210.
    20. Di Novi, C. & Piacenza, M. & Robone, S. & Turati, G., 2015. "How does fiscal decentralization affect within-regional disparities in well-being? Evidence from health inequalities in Italy," Health, Econometrics and Data Group (HEDG) Working Papers 15/23, HEDG, c/o Department of Economics, University of York.
    21. Michele Cincera & Antonio Estache & Wolf Alexander, 2012. "Would Less Fiscal Decentralization Reduce Public Sector Size across Sectors in Europe ?," Working Papers ECARES ECARES 2012-028, ULB -- Universite Libre de Bruxelles.

    More about this item

    Keywords

    Federalism; Regional decentralization; Non-democracies;
    All these keywords.

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jcecon:v:45:y:2017:i:1:p:110-118. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622864 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.