Spatial Decentralization and Program Evaluation: Theory and an Example from Indonesia
AbstractThis paper proposes a novel instrumental variable method for program evaluation that only requires a single cross-section of data on the spatial intensity of programs and outcomes. The instruments are derived from a simple theoretical model of government decision-making in which governments are responsive to the attributes of places and their populations, rather than to the attributes of individuals, in making allocation decisions across space, and have a social welfare function that is spatially weakly separable, that is, that the budgeting process is multi-stage with respect to administrative districts and sub-districts. The spatial instrumental variables model is then estimated and tested by GMM with a single cross-section of Indonesian census data. The results offer support to the identification strategy proposed.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5208.
Length: 31 pages
Date of creation: Sep 2010
Date of revision:
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Other versions of this item:
- Nidhiya Menon & Mark M. Pitt, 2010. "Spatial Decentralization and Program Evaluation: Theory and an Example from Indonesia," Working Papers, Brandeis University, Department of Economics and International Businesss School 16, Brandeis University, Department of Economics and International Businesss School.
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-09 (All new papers)
- NEP-SEA-2010-10-09 (South East Asia)
- NEP-URE-2010-10-09 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Enhanced routines for instrumental variables/GMM estimation and testing,"
Boston College Working Papers in Economics, Boston College Department of Economics
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