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Decentralizing corruption: Irrigation reform in Pakistan

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  • Jacoby, Hanan G.
  • Mansuri, Ghazala
  • Fatima, Freeha

Abstract

Does decentralizing the allocation of public resources reduce rent-seeking and improve equity? We study a governance reform in Pakistan’s vast Indus Basin irrigation system, where corruption is endemic. Using canal discharge measurements across Punjab province from 2006 to 2014, we find that water theft increased on channels taken over by local farmer organizations compared to those that remained bureaucratically managed, reducing agricultural surplus and substantially redistributing wealth from downstream to upstream landowners. Water theft increased by more along channels with relatively larger (more influential) upstream landowners, suggesting that the political-economy context is critical to the success, or lack thereof, of decentralization.

Suggested Citation

  • Jacoby, Hanan G. & Mansuri, Ghazala & Fatima, Freeha, 2021. "Decentralizing corruption: Irrigation reform in Pakistan," Journal of Public Economics, Elsevier, vol. 202(C).
    • Handle: RePEc:eee:pubeco:v:202:y:2021:i:c:s0047272721001353
    DOI: 10.1016/j.jpubeco.2021.104499
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    Cited by:

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    6. Kong, Dongmin & Liu, Chenhao, 2024. "Centralization and regulatory enforcement: Evidence from personnel authority reform in China," Journal of Public Economics, Elsevier, vol. 229(C).

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    Keywords

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    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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