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Do external grants to district governments discourage own-revenue generation?: A look at local public finance dynamics in Ghana

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  • Mogues, Tewodaj
  • Benin, Samuel
  • Cudjoe, Godsway

Abstract

Using rich panel data on all of Ghana’s districts’ local public finances over 11 years, this paper investigates the way that intergovernmental and other transfers to local governments affect local governments’ incentives to collect internally generated revenues and funds (IGF). We find that despite an incentive scheme built into one of the major intergovernmental grants, the flow of all grants taken together discourages, rather than encourages, IGF. This is reflected both in the depressing effect of transfers on IGF levels, as well as on IGF growth.

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 934.

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Date of creation: 2009
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Handle: RePEc:fpr:ifprid:934

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Keywords: Decentralization; Inter-governmental transfers; Local government; Internally generated revenues; Development strategies;

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Citations

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Cited by:
  1. Wu, Alfred M. & Wang, Wen, 2013. "Determinants of Expenditure Decentralization: Evidence from China," World Development, Elsevier, vol. 46(C), pages 176-184.
  2. Mesplé-Somps, Sandrine & André, Pierre, 2013. "Sitting on the fence: Pork - barrels and democratization under threat of conflict. The case of Ghana, 1996 - 2004," Economics Papers from University Paris Dauphine 123456789/12022, Paris Dauphine University.
  3. Paul Smoke, 2013. "Why Theory and Practice are Different: The Gap Between Principles and Reality in Subnational Revenue Systems," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper1313, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  4. Kolavalli, Shashidhara & Birner, Regina & Benin, Samuel & Horowitz, Leah & Babu, Suresh & Asenso-Okyere, Kwadwo & Thompson, Nii Moi & Poku, John, 2010. "Institutional and public expenditure review of Ghana’s Ministry of Food and Agriculture," IFPRI discussion papers 1020, International Food Policy Research Institute (IFPRI).

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