IDEAS home Printed from https://ideas.repec.org/a/eee/deveco/v107y2014icp28-37.html
   My bibliography  Save this article

Shared accountability and partial decentralization in local public good provision

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304387813001648
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Khemani, Stuti, 2007. "Does delegation of fiscal policy to an independent agency make a difference? Evidence from intergovernmental transfers in India," Journal of Development Economics, Elsevier, vol. 82(2), pages 464-484, March.
    2. Besley, Timothy & Case, Anne, 1995. "Incumbent Behavior: Vote-Seeking, Tax-Setting, and Yardstick Competition," American Economic Review, American Economic Association, vol. 85(1), pages 25-45, March.
    3. Alberto Alesina & Guido Tabellini, 2007. "Bureaucrats or Politicians? Part I: A Single Policy Task," American Economic Review, American Economic Association, vol. 97(1), pages 169-179, March.
    4. Mario Jametti & Marcelin Joanis, 2016. "Electoral Competition as a Determinant of Fiscal Decentralisation," Fiscal Studies, Institute for Fiscal Studies, vol. 37, pages 285-300, June.
    5. Ben Lockwood, 2002. "Distributive Politics and the Costs of Centralization," Review of Economic Studies, Oxford University Press, vol. 69(2), pages 313-337.
    6. Besley, Timothy & Smart, Michael, 2007. "Fiscal restraints and voter welfare," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 755-773, April.
    7. Philip Keefer & Stuti Khemani, 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.
    8. Brueckner, Jan K., 2009. "Partial fiscal decentralization," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 23-32, January.
    9. Alesina, Alberto & Tabellini, Guido, 2008. "Bureaucrats or politicians? Part II: Multiple policy tasks," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 426-447, April.
    10. Hindriks, Jean & Lockwood, Ben, 2009. "Decentralization and electoral accountability: Incentives, separation and voter welfare," European Journal of Political Economy, Elsevier, vol. 25(3), pages 385-397, September.
    11. Mathias Dewatripont & Ian Jewitt & Jean Tirole, 1999. "The Economics of Career Concerns, Part II: Application to Missions and Accountability of Government Agencies," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 199-217.
    12. Gabriela Inchauste, 2009. "Decentralization in Bolivia: Has it Made a Difference?," Chapters, in: Ehtisham Ahmad & Giorgio Brosio (ed.), Does Decentralization Enhance Service Delivery and Poverty Reduction?, chapter 7, Edward Elgar Publishing.
    13. Paul Belleflamme & Jean Hindriks, 2005. "Yardstick competition and political agency problems," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 24(1), pages 155-169, September.
    14. Kessing, Sebastian G., 2010. "Federalism and accountability with distorted election choices," Journal of Urban Economics, Elsevier, vol. 67(2), pages 239-247, March.
    15. Emilie Caldeira & Martial Foucault & Grégoire Rota-Graziosi, 2014. "Does Decentralization Facilitate Access to Poverty-Related Services? Evidence from Benin," NBER Chapters, in: African Successes, Volume I: Government and Institutions, pages 57-102, National Bureau of Economic Research, Inc.
    16. Bardhan, Pranab & Mookherjee, Dilip, 2005. "Decentralizing antipoverty program delivery in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 675-704, April.
    17. Ehtisham Ahmad & Giorgio Brosio & Maria Gonzalez, 2009. "Uganda: Managing More Effective Decentralization," Chapters, in: Ehtisham Ahmad & Giorgio Brosio (ed.), Does Decentralization Enhance Service Delivery and Poverty Reduction?, chapter 8, Edward Elgar Publishing.
    18. Besley, Timothy & Coate, Stephen, 2003. "Centralized versus decentralized provision of local public goods: a political economy approach," Journal of Public Economics, Elsevier, vol. 87(12), pages 2611-2637, December.
    19. Mariano Tommasi & Federico Weinschelbaum, 2007. "Centralization vs. Decentralization: A Principal‐Agent Analysis," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(2), pages 369-389, April.
    20. Shantayanan Devarajan & Stuti Khemani & Shekhar Shah, 2009. "The Politics of Partial Decentralization," Chapters, in: Ehtisham Ahmad & Giorgio Brosio (ed.), Does Decentralization Enhance Service Delivery and Poverty Reduction?, chapter 5, Edward Elgar Publishing.
    21. Yukihiro Nishimura, 2006. "Human Fallibility, Complementarity, and Fiscal Decentralization," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(3), pages 487-501, August.
    22. Pranab Bardhan, 2006. "Decentralization and Development," Chapters, in: Ehtisham Ahmad & Giorgio Brosio (ed.), Handbook of Fiscal Federalism, chapter 8, Edward Elgar Publishing.
    23. Ben Lockwood, 2006. "The Political Economy of Decentralization," Chapters, in: Ehtisham Ahmad & Giorgio Brosio (ed.), Handbook of Fiscal Federalism, chapter 1, Edward Elgar Publishing.
    24. Mathias Dewatripont & Ian Jewitt & Jean Tirole, 1999. "The Economics of Career Concerns, Part II: Application to Missions and Accountability of Government Agencies," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 199-217.
    25. Michael J. Keen & Christos Kotsogiannis, 2002. "Does Federalism Lead to Excessively High Taxes?," American Economic Review, American Economic Association, vol. 92(1), pages 363-370, March.
    26. Dilip Mookherjee & Pranab K. Bardhan, 2000. "Capture and Governance at Local and National Levels," American Economic Review, American Economic Association, vol. 90(2), pages 135-139, May.
    27. Weingast, Barry R., 2009. "Second generation fiscal federalism: The implications of fiscal incentives," Journal of Urban Economics, Elsevier, vol. 65(3), pages 279-293, May.
    28. Pranab Bardhan & Dilip Mookherjee, 2006. "Decentralisation and Accountability in Infrastructure Delivery in Developing Countries," Economic Journal, Royal Economic Society, vol. 116(508), pages 101-127, January.
    29. Mani, Anandi & Mukand, Sharun, 2007. "Democracy, visibility and public good provision," Journal of Development Economics, Elsevier, vol. 83(2), pages 506-529, July.
    30. Seabright, Paul, 1996. "Accountability and decentralisation in government: An incomplete contracts model," European Economic Review, Elsevier, vol. 40(1), pages 61-89, January.
    31. Khemani, Stuti, 2010. "Political capture of decentralization : vote-buying through grants-financed local jurisdictions," Policy Research Working Paper Series 5350, The World Bank.
    32. Maciej Jakubowski & Irena Topińska, 2009. "The Impact of Decentralization on Education in Poland," Chapters, in: Ehtisham Ahmad & Giorgio Brosio (ed.), Does Decentralization Enhance Service Delivery and Poverty Reduction?, chapter 9, Edward Elgar Publishing.
    33. Ehtisham Ahmad & Giorgio Brosio, 2009. "Does Decentralization Enhance Service Delivery and Poverty Reduction?," Chapters, in: Ehtisham Ahmad & Giorgio Brosio (ed.), Does Decentralization Enhance Service Delivery and Poverty Reduction?, chapter 1, Edward Elgar Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Federico Boffa & Amedeo Piolatto & Giacomo A. M. Ponzetto, 2016. "Political Centralization and Government Accountability," The Quarterly Journal of Economics, Oxford University Press, vol. 131(1), pages 381-422.
    2. Kodjovi M. Eklou & Marcelin Joanis, 2019. "Do Fiscal Rules Cause Fiscal Discipline Over the Electoral Cycle?," IMF Working Papers 2019/291, International Monetary Fund.
    3. 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.
    4. Mario Jametti & Marcelin Joanis, 2014. "Elections and de facto Expenditure Decentralization in Canada," CESifo Working Paper Series 4791, CESifo.
    5. Sanogo, Tiangboho, 2019. "Does fiscal decentralization enhance citizens’ access to public services and reduce poverty? Evidence from Côte d’Ivoire municipalities in a conflict setting," World Development, Elsevier, vol. 113(C), pages 204-221.
    6. 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.
    7. 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.
    8. Ferraresi, Massimiliano & Kotsogiannis, Christos & Rizzo, Leonzio, 2018. "Decentralization and fuel subsidies," Energy Economics, Elsevier, vol. 74(C), pages 275-286.
    9. 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.
    10. 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.
    11. 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.
    12. Mark Gradstein, 2014. "Government Decentralization as a Commitment," CESifo Working Paper Series 4809, CESifo.
    13. Robin Boadway & Katherine Cuff, 2017. "The impressive contribution of Canadian economists to fiscal federalism theory and policy," Canadian Journal of Economics, Canadian Economics Association, vol. 50(5), pages 1348-1380, December.
    14. Sergio Galletta, 2020. "Direct democracy, partial decentralization and voter information: evidence from Swiss municipalities," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(5), pages 1174-1197, October.
    15. 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.
    16. Evan Plous Kresch, 2020. "The Buck Stops Where? Federalism, Uncertainty, and Investment in the Brazilian Water and Sanitation Sector," American Economic Journal: Economic Policy, American Economic Association, vol. 12(3), pages 374-401, August.
    17. Mario Jametti & Marcelin Joanis, 2020. "Elections and de facto expenditure decentralization in Canada," Economics of Governance, Springer, vol. 21(3), pages 275-297, September.
    18. 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.
    19. Grażyna Bukowska & Joanna Siwińska, 2016. "Czy konkurencja determinuje wielkość inwestycji gmin miejskich w Polsce?," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 6, pages 95-114.
    20. 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.
    21. Feder, Christophe, 2018. "Decentralization and spillovers: A new role for transportation infrastructure," Economics of Transportation, Elsevier, vol. 13(C), pages 36-47.
    22. Gradstein, Mark, 2017. "Government decentralization as a commitment in non-democracies," Journal of Comparative Economics, Elsevier, vol. 45(1), pages 110-118.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marcelin Joanis, 2008. "Intertwined Federalism: Accountability Problems under Partial Decentralization," Cahiers de recherche 08-22, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    2. Mario Jametti & Marcelin Joanis, 2020. "Elections and de facto expenditure decentralization in Canada," Economics of Governance, Springer, vol. 21(3), pages 275-297, September.
    3. Federico Boffa & Amedeo Piolatto & Giacomo A. M. Ponzetto, 2016. "Political Centralization and Government Accountability," The Quarterly Journal of Economics, Oxford University Press, vol. 131(1), pages 381-422.
    4. Fernando Albornoz & Antonio Cabrales, 2010. "Fiscal Centralization and the Political Process," Working Papers 2010-02, FEDEA.
    5. Albornoz, Facundo & Cabrales, Antonio, 2013. "Decentralization, political competition and corruption," Journal of Development Economics, Elsevier, vol. 105(C), pages 103-111.
    6. Hindriks, Jean & Lockwood, Ben, 2009. "Decentralization and electoral accountability: Incentives, separation and voter welfare," European Journal of Political Economy, Elsevier, vol. 25(3), pages 385-397, September.
    7. Marta Espasa & Alejandro Esteller-Moré & Toni Mora, 2017. "Is Decentralization Really Welfare Enhancing? Empirical Evidence from Survey Data (1994-2011)," Kyklos, Wiley Blackwell, vol. 70(2), pages 189-219, May.
    8. David Bartolini & Agnese Sacchi & Domenico Scalera & Alberto Zazzaro, 2018. "The closer the better? Institutional distance and information blurring in a political agency model," Mo.Fi.R. Working Papers 146, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    9. Gijs Roelofs & Daniel Vuuren, 2017. "The Decentralization of Social Assistance and the Rise of Disability Insurance Enrolment," De Economist, Springer, vol. 165(1), pages 1-21, March.
    10. Toke S. Aidt & Jayasri Dutta, 2017. "Fiscal Federalism and Electoral Accountability," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(1), pages 38-58, February.
    11. Antonio Farfan-Vallespin, 2012. "Decentralization as Unbundling of Public Goods Provision - New Effects of Decentralization on Efficiency and Electoral Control," Discussion Paper Series 21, Department of International Economic Policy, University of Freiburg, revised Nov 2012.
    12. Raúl A. Ponce-Rodríguez & Charles R. Hankla & Jorge Martinez-Vazquez & Eunice Heredia-Ortiz, 2020. "The politics of fiscal federalism: Building a stronger decentralization theorem," Journal of Theoretical Politics, , vol. 32(4), pages 605-639, October.
    13. Emilie Caldeira & Martial Foucault & Grégoire Rota-Graziosi, 2014. "Does Decentralization Facilitate Access to Poverty-Related Services? Evidence from Benin," NBER Chapters, in: African Successes, Volume I: Government and Institutions, pages 57-102, National Bureau of Economic Research, Inc.
    14. Mario Jametti & Marcelin Joanis, 2010. "Determinants of fiscal decentralization: political economy aspects," Working Papers 2010/7, Institut d'Economia de Barcelona (IEB).
    15. 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.
    16. Stuti Khemani, 2010. "Decentralization by Politicians: Creation of Grants-financed Local Jurisdictions," Chapters, in: Núria Bosch & Marta Espasa & Albert Solé Ollé (ed.), The Political Economy of Inter-Regional Fiscal Flows, chapter 9, Edward Elgar Publishing.
    17. Christos Kotsogiannis & Robert Schwager, 2006. "Fiscal Equalization and Yardstick Competition," CESifo Working Paper Series 1865, CESifo.
    18. Kotsogiannis, Christos & Schwager, Robert, 2008. "Accountability and fiscal equalization," Journal of Public Economics, Elsevier, vol. 92(12), pages 2336-2349, December.
    19. Gijs Roelofs & Daniel Vuuren, 2017. "The Decentralization of Social Assistance and the Rise of Disability Insurance Enrolment," De Economist, Springer, vol. 165(1), pages 1-21, March.

    More about this item

    Keywords

    Partial decentralization; Accountability; Shared responsibility; Local public goods; Vertical interactions;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:107:y:2014:i:c:p:28-37. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nithya Sathishkumar). General contact details of provider: http://www.elsevier.com/locate/devec .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.