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Does Decentralization Decrease State Fragility? Evidence from Developing Countries

Author

Listed:
  • Charly Ondobo Tsala

    (University of Ngaoundéré)

  • Raymond Ekodo

    (University of Ngaoundéré)

  • Henri Tabi Ngoa

    (University of Yaoundé II)

Abstract

This paper analyses whether and how decentralization decrease state fragility in developing countries. Fiscal autonomy index that reflects local’s autonomy decision-making is considered to measure decentralization. The empirical analysis uses the generalized method of moments (GMM) on a sample of 64 developing countries from 1995 to 2018. Our study finds that increased local government’ autonomy in decision-making positively affects the decreasing of state fragility in developing countries and substantially increase state legitimacy. The result is robust to a battery of robustness checks. Furthermore, the result of nonlinear analysis shows a U-inverted and U-shaped connection between decentralization and state fragility. The result also indicates that the fiscal “share-rule” system between central and local governments increases the likelihood of state fragility. From a policy implication, we suggest to give more political and financial autonomy to the local government in order to provide better quality of public goods and services to the citizens.

Suggested Citation

  • Charly Ondobo Tsala & Raymond Ekodo & Henri Tabi Ngoa, 2025. "Does Decentralization Decrease State Fragility? Evidence from Developing Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(4), pages 15228-15259, October.
    • Handle: RePEc:spr:jknowl:v:16:y:2025:i:4:d:10.1007_s13132-024-02400-2
    DOI: 10.1007/s13132-024-02400-2
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    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • P00 - Political Economy and Comparative Economic Systems - - General - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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