Does fiscal decentralisation strengthen social capital? Cross-country evidence and the experiences of Brazil and Indonesia
AbstractWith this paper I test the hypothesis that, by giving people more voice in the government decision-making process, fiscal decentralisation fosters social capital, measured in terms of interpersonal trust. Empirical evidence based on World Values Survey data and seemingly unrelated probit estimations for a cross-section of countries suggests that people living in federal and decentralised countries find it more important to have a voice in government decisions than their counterparts living in unitary and centralised countries. Provoice attitudes are, in turn, associated with greater social capital. The cross-country estimations are complemented by country-specific regressions for Brazil and Indonesia on account of these countries’ experiences with fiscal decentralisation. The results show that the cohorts of individuals that have been exposed to decentralisation are in general more provoice (and trustful of strangers in the case of Brazil) than their counterparts that have not been exposed to decentralisation. These findings are not driven by the effects of political liberalisation on people’s attitudes towards the importance of having a voice in government decisions and interpersonal trust.
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Bibliographic InfoArticle provided by Pion Ltd, London in its journal Environment and Planning C: Government and Policy.
Volume (Year): 29 (2011)
Issue (Month): 2 (April)
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Web page: http://www.pion.co.uk
Other versions of this item:
- Luiz de Mello, 2010. "Does Fiscal Decentralization Strengthen Social Capital? Cross-Country Evidence and the Experiences of Brazil and Indonesia," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1007, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- Luiz de Mello, 2010. "Does Fiscal Decentralisation Strengthen Social Capital?: Cross-Country Evidence and the Experiences of Brazil and Indonesia," OECD Economics Department Working Papers 825, OECD Publishing.
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
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