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Decentralization in Developing Economies

Author

Listed:
  • Lucie Gadenne

    () (Department of Economics, University College London, London WC1H 0AX, United Kingdom)

  • Monica Singhal

    () (Harvard Kennedy School, Harvard University, Cambridge, Massachusetts 02138)

Abstract

Standard models of fiscal federalism suggest many benefits of decentralization in developing economies, and there has been a recent push toward decentralization around the world. However, developing countries presently still have less decentralization, particularly on the revenue side, than both developed countries today and the United States and Europe historically. We consider how the trade-offs associated with fiscal federalism apply in developing countries and discuss reasons for their relatively low levels of decentralization. We also consider additional features relevant to federalism in developing economies, such as the prevalence of nongovernmental organizations and the role of social incentives in policy design.

Suggested Citation

  • Lucie Gadenne & Monica Singhal, 2014. "Decentralization in Developing Economies," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 581-604, August.
  • Handle: RePEc:anr:reveco:v:6:y:2014:p:581-604
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-economics-080213-040833
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    Citations

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    Cited by:

    1. Don Fullerton & Erich Muehlegger, 2017. "Who Bears the Economic Costs of Environmental Regulations?," NBER Working Papers 23677, National Bureau of Economic Research, Inc.
    2. Kis-Katos, Krisztina & Sjahrir, Bambang Suharnoko, 2017. "The impact of fiscal and political decentralization on local public investment in Indonesia," Journal of Comparative Economics, Elsevier, vol. 45(2), pages 344-365.
    3. Lucie Gadenne, 2017. "Tax Me, but Spend Wisely? Sources of Public Finance and Government Accountability," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 274-314, January.
    4. Golan, Jennifer & Sicular, Terry & Umapathi, Nithin, 2017. "Unconditional Cash Transfers in China: Who Benefits from the Rural Minimum Living Standard Guarantee (Dibao) Program?," World Development, Elsevier, vol. 93(C), pages 316-336.
    5. Smoke, Paul, 2016. "Looking Beyond Conventional Intergovernmental Fiscal Frameworks: Principles, Realities, and Neglected Issues," ADBI Working Papers 606, Asian Development Bank Institute.
    6. Leonardo Corral & Heath Henderson & Juan José Miranda, 2016. "Evidence from a Natural Experiment on the Development Impact of Windfall Gains: The Camisea Fund in Peru," IDB Publications (Working Papers) 7520, Inter-American Development Bank.
    7. repec:eee:injoed:v:53:y:2017:i:c:p:12-27 is not listed on IDEAS
    8. repec:eee:pubeco:v:159:y:2018:i:c:p:225-243 is not listed on IDEAS
    9. Jose Guimon, 2014. "Regional Inovation Policy and Multilevel Governance in Developing Countries," World Bank Other Operational Studies 23655, The World Bank.

    More about this item

    Keywords

    fiscal federalism; public goods; taxation; transfers; corruption;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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