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Fiscal Decentralization and Development Outcomes in India: An Exploratory Analysis

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  • Kalirajan, Kaliappa
  • Otsuka, Keijiro

Abstract

This paper attempts to quantify the impact of fiscal decentralization in India on its social infrastructure and on rural development. Overall, the results in this paper indicate that Government of India within a federal framework has been fostering development equitably across its states, particularly through health and education expenditures aimed at improving human capital development. In this context, the importance of the two tier centre-states decentralization should be noted. However, the third tier of local governance, particularly the state-rural local bodies decentralization has been dismal and has not achieved significant results across states, which warrant the attention of the central and state governments.

Suggested Citation

  • Kalirajan, Kaliappa & Otsuka, Keijiro, 2012. "Fiscal Decentralization and Development Outcomes in India: An Exploratory Analysis," World Development, Elsevier, vol. 40(8), pages 1511-1521.
  • Handle: RePEc:eee:wdevel:v:40:y:2012:i:8:p:1511-1521
    DOI: 10.1016/j.worlddev.2012.04.005
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    Cited by:

    1. Iftikhar Ahmad, 2016. "Assessing the Effects of Fiscal Decentralization on the Education Sector: A Cross-Country Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(2), pages 53-96, July-Dec.
    2. Dolly Daftary, 2016. "Development in Post-liberalization India: Marketization, Decentralization and Informalization in Gujarat," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 28(4), pages 690-704, September.
    3. Smoke, Paul, 2016. "Looking Beyond Conventional Intergovernmental Fiscal Frameworks: Principles, Realities, and Neglected Issues," ADBI Working Papers 606, Asian Development Bank Institute.
    4. 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.
    5. Ciccone, Dana Karen & Vian, Taryn & Maurer, Lydia & Bradley, Elizabeth H., 2014. "Linking governance mechanisms to health outcomes: A review of the literature in low- and middle-income countries," Social Science & Medicine, Elsevier, vol. 117(C), pages 86-95.
    6. Betz, Joachim, 2019. "India's social policies: Recent changes for the better and their causes," GIGA Working Papers 314, GIGA German Institute of Global and Area Studies.
    7. Sandhya Garg, 2015. "Spatial convergence in public expenditure across Indian states: Implication of federal transfers," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2015-028, Indira Gandhi Institute of Development Research, Mumbai, India.
    8. Cook, Nathan J. & Wright, Glenn D. & Andersson, Krister P., 2017. "Local Politics of Forest Governance: Why NGO Support Can Reduce Local Government Responsiveness," World Development, Elsevier, vol. 92(C), pages 203-214.

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