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Political capture of decentralization : vote-buying through grants-financed local jurisdictions

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  • Khemani, Stuti

Abstract

A recent trend in decentralization in several large and diverse countries is the creation of local jurisdictions below the regional level -- municipalities, towns, and villages -- whose spending is almost exclusively financed by grants from both regional and national governments. This paper argues that such grants-financed decentralization enables politicians to target benefits to pivotal voters and organized interest groups in exchange for political support. Decentralization, in this model, is subject to political capture, facilitating vote-buying, patronage, or pork-barrel projects, at the expense of effective provision of broad public goods. There is anecdotal evidence on local politics in several large countries that is consistent with this theory. The paper explores its implications for international development programs in support of decentralization.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5350.

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Date of creation: 01 Jun 2010
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Handle: RePEc:wbk:wbrwps:5350

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Keywords: Subnational Economic Development; Public Sector Economics; National Governance; Parliamentary Government; Banks&Banking Reform;

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  1. Timothy Besley & Rohini Pande & Lupin Rahman & Vijayendra Rao, 2004. "The Politics of Public Good Provision: Evidence from Indian Local Governments," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 416-426, 04/05.
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Cited by:
  1. 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.
  2. Joanis, Marcelin, 2014. "Shared accountability and partial decentralization in local public good provision," Journal of Development Economics, Elsevier, vol. 107(C), pages 28-37.
  3. Sarah Baird & Craig McIntosh & Berk Özler, 2011. "The Regressive Demands of Demand-Driven Development," Working Papers 2011-21, The George Washington University, Institute for International Economic Policy.
  4. 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).

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