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Shared accountability and partial decentralization in local public good provision

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  • Joanis, Marcelin

Abstract

Recent decentralization reforms in developing countries have often lead to the coexistence of multiple tiers of government in given policy areas, triggering new accountability issues. This paper provides a novel theoretical treatment of the efficiency consequences of such ‘partial expenditure decentralization.’ It develops a political agency model in which two levels of government are involved in the provision of a local public good, with voters imperfectly informed about each government's contribution to the public good. A central result of the model is that partial decentralization is desirable only if the benefits of vertical complementarity in public good provision outweigh the costs of reduced accountability, which result from detrimental vertical strategic interactions operating through the electoral process. Through variants of the model, the interplay between decentralization and democratization is analyzed. From a positive point of view, the model predicts a relationship between electoral incentives and equilibrium decentralization.

Suggested Citation

  • Joanis, Marcelin, 2014. "Shared accountability and partial decentralization in local public good provision," Journal of Development Economics, Elsevier, vol. 107(C), pages 28-37.
  • Handle: RePEc:eee:deveco:v:107:y:2014:i:c:p:28-37
    DOI: 10.1016/j.jdeveco.2013.11.002
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    Cited by:

    1. Federico Boffa & Amedeo Piolatto & Giacomo A. M. Ponzetto, 2011. "Political centralization and government accountability," Economics Working Papers 1335, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2015.
    2. repec:bla:presci:v:97:y:2018:i:3:p:801-826 is not listed on IDEAS
    3. Mario Jametti & Marcelin Joanis, 2014. "Elections and de facto Expenditure Decentralization in Canada," CESifo Working Paper Series 4791, CESifo Group Munich.
    4. repec:eee:wdevel:v:113:y:2019:i:c:p:204-221 is not listed on IDEAS
    5. Marco Catola, 2019. "Partial decentralisation and inter-governmental electoral competition in local public good provision," Discussion Papers 2019/243, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    6. Bellofatto, Antonio Andrés & Besfamille, Martín, 2018. "Regional state capacity and the optimal degree of fiscal decentralization," Journal of Public Economics, Elsevier, vol. 159(C), pages 225-243.
    7. repec:eee:eneeco:v:74:y:2018:i:c:p:275-286 is not listed on IDEAS
    8. Galletta, Sergio & Jametti, Mario, 2015. "How to tame two Leviathans? Revisiting the effect of direct democracy on local public expenditure in a federation," European Journal of Political Economy, Elsevier, vol. 39(C), pages 82-93.
    9. Bruno Borger & Stef Proost, 2016. "The political economy of pricing and capacity decisions for congestible local public goods in a federal state," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(5), pages 934-959, October.
    10. Estache, Antonio & Garsous, Grégoire & Seroa da Motta, Ronaldo, 2016. "Shared Mandates, Moral Hazard, and Political (Mis)alignment in a Decentralized Economy," World Development, Elsevier, vol. 83(C), pages 98-110.
    11. Andrea Filippetti & Giovanni Cerulli, 2018. "Are local public services better delivered in more autonomous regions? Evidence from European regions using a dose‐response approach," Papers in Regional Science, Wiley Blackwell, vol. 97(3), pages 801-826, August.
    12. Mark Gradstein, 2014. "Government Decentralization as a Commitment," CESifo Working Paper Series 4809, CESifo Group Munich.
    13. Teferi Mergo & Alain-Desire Nimubona & Horatiu Rus, 2019. "Political Representation and the Provision of Public Goods: Theory and Evidence from Ethiopia," Working Papers 1901, University of Waterloo, Department of Economics, revised Jan 2019.
    14. Mario Jametti & Marcelin Joanis, 2014. "Elections and de facto Expenditure Decentralization in Canada," CESifo Working Paper Series 4791, CESifo Group Munich.
    15. Boukari, Mamadou & Veiga, Francisco José, 2018. "Disentangling political and institutional determinants of budget forecast errors: A comparative approach," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 1030-1045.
    16. repec:sgh:gosnar:y:2016:i:6:p:95-114 is not listed on IDEAS
    17. Estache, Antonio & Garsous, Grégoire & Seroa da Motta, Ronaldo, 2016. "Shared Mandates, Moral Hazard, and Political (Mis)alignment in a Decentralized Economy," World Development, Elsevier, vol. 83(C), pages 98-110.
    18. repec:eee:ecotra:v:13:y:2018:i:c:p:36-47 is not listed on IDEAS
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    More about this item

    Keywords

    Partial decentralization; Accountability; Shared responsibility; Local public goods; Vertical interactions;

    JEL classification:

    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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