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Addressing Regional Inequality Issues in Bangladesh Public Expenditure

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  • Mahmoud, Chowdhury Shameem
  • Wadood, Syed Naimul
  • Ahmed, Kazi Sabbir

Abstract

The public expenditure allocation in Bangladesh has played a substantial role in improvements of physical infrastructure, health, education, community development, etc. during the recent decades. There have been allegations that inequality in the distribution of political power has often led to some extent to a disproportionate public spending, which in turn may hinder prospects of poverty reduction. The current study aims to examine the research question of whether regional inequality issues are properly addressed within the framework of the public expenditure allocation in Bangladesh during the recent years and if not, whether this has been influenced by some other considerations, which are mainly political by nature. We analyze a panel data set where the dependent variable is the (greater district) per capita ADP allocation within a sector and the independent variables are some explanatory variables, and a variable of interest measuring the proportion of the total number of constituencies within the greater district that belongs to the political party in power. In summary, the study provides evidence of some in-built regional inequality features within the public expenditure allocation in Bangladesh in association with the political favoritism issues involved in a supposedly parliamentary democratic system.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 14329.

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Date of creation: 13 Mar 2008
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Handle: RePEc:pra:mprapa:14329

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Keywords: Public Expenditure; Regional Inequality; Political Influence in Regional Distribution of Public Expenditure; Panel Data;

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  1. Philip Keefer, 2005. "Democracy, Public Expenditures, and the Poor: Understanding Political Incentives for Providing Public Services," World Bank Research Observer, World Bank Group, vol. 20(1), pages 1-27.
  2. Tam, Mo-Yin S & Persky, Joseph, 1982. "Regional Convergence and National Inequality," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 161-65, February.
  3. Sanjeev Gupta, 1998. "Does Corruption Affect Income Inequality and Poverty?," IMF Working Papers 98/76, International Monetary Fund.
  4. Shankar, Raja & Shah, Anwar, 2003. "Bridging the Economic Divide Within Countries: A Scorecard on the Performance of Regional Policies in Reducing Regional Income Disparities," World Development, Elsevier, vol. 31(8), pages 1421-1441, August.
  5. Vito Tanzi & Hamid Reza Davoodi, 1997. "Corruption, Public Investment, and Growth," IMF Working Papers 97/139, International Monetary Fund.
  6. Anwar Shah, 2005. "Public Expenditure Analysis," World Bank Publications, The World Bank, number 7436, September.
  7. Atlas, Cary M, et al, 1995. "Slicing the Federal Government Net Spending Pie: Who Wins, Who Loses, and Why," American Economic Review, American Economic Association, vol. 85(3), pages 624-29, June.
  8. Keefer, Philip & Khemani, Stuti, 2003. "Democracy, public expenditures, and the poor," Policy Research Working Paper Series 3164, The World Bank.
  9. Edna Loehman & Robert Emerson, 1985. "A Simultaneous Equation Model of Local Government Expenditure Decisions," Land Economics, University of Wisconsin Press, vol. 64(4), pages 419-432.
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