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Do External Grants to District Governments Discourage Own Revenue Generation? A Look at Local Public Finance Dynamics in Ghana

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  • Mogues, Tewodaj
  • Benin, Samuel

Abstract

Using rich panel data on all of Ghana’s districts’ local public finances over 11 years, this paper investigates the way that intergovernmental and other transfers to local governments affect local governments’ incentives to collect internally generated revenues and funds (IGF). We find that despite an incentive scheme built into one of the major intergovernmental grants, the flow of all grants taken together discourages, rather than encourages, IGF. This is reflected both in the depressing effect of transfers on IGF levels, as well as on IGF growth.

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  • Mogues, Tewodaj & Benin, Samuel, 2012. "Do External Grants to District Governments Discourage Own Revenue Generation? A Look at Local Public Finance Dynamics in Ghana," World Development, Elsevier, vol. 40(5), pages 1054-1067.
  • Handle: RePEc:eee:wdevel:v:40:y:2012:i:5:p:1054-1067
    DOI: 10.1016/j.worlddev.2011.12.001
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    Citations

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    Cited by:

    1. Pierre André & Sandrine Mesplé-Somps, 2013. "Sitting on the fence: Pork-barrels and democratization under threat of conflict. The case of Ghana, 1996 - 2004," THEMA Working Papers 2013-24, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    2. Wu, Alfred M. & Wang, Wen, 2013. "Determinants of Expenditure Decentralization: Evidence from China," World Development, Elsevier, vol. 46(C), pages 176-184.
    3. Paul Smoke, 2013. "Why Theory and Practice are Different: The Gap Between Principles and Reality in Subnational Revenue Systems," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1313, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    4. Paul Smoke, 2014. "Why theory and practice are different: The gap between principles and reality in subnational revenue systems," Chapters,in: Taxation and Development: The Weakest Link?, chapter 9, pages 287-325 Edward Elgar Publishing.
    5. Takaaki Masaki, 2016. "The impact of intergovernmental transfers on local revenue generation in Africa Evidence from Tanzania," WIDER Working Paper Series 113, World Institute for Development Economic Research (UNU-WIDER).
    6. Pierre André & Sandrine Mesplé-Somps, 2017. "Sitting on the fence: Pork - barrels and democratization under threat of conflict. The case of Ghana, 1996 - 2004," Working Papers hal-01619605, HAL.
    7. Ivan Gonzalez & Budy P Resosudarmo, 2016. "A sectoral growth-income inequality nexus in Indonesia," Departmental Working Papers 2016-15, The Australian National University, Arndt-Corden Department of Economics.
    8. Kolavalli, Shashidhara & Birner, Regina & Benin, Samuel & Horowitz, Leah & Babu, Suresh & Asenso-Okyere, Kwadwo & Thompson, Nii Moi & Poku, John, 2010. "Institutional and public expenditure review of Ghana’s Ministry of Food and Agriculture," IFPRI discussion papers 1020, International Food Policy Research Institute (IFPRI).

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