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Decentralization and the Welfare State: What Do Citizens Perceive?

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  • Luis Diaz-Serrano
  • Andrés Rodríguez-Pose

Abstract

Trust in public institutions and public policies are generally perceived as a precondition for economic recovery in times of recession. Recent empirical evidence tends to find a positive link between decentralization and trust. But our knowledge about whether decentralization—through increased trust—improves the perception of the delivery and effectiveness of public policies is still limited. In this paper we estimate the impact of fiscal and political decentralization on the perception of the state of the education system and of health services, by using the 2002, 2004, 2006 and 2008 waves of the European social survey. The analysis of the views of 160,000 individuals in 31 European countries indicates that while the effect of fiscal decentralization on the perception of the state of the health and education system is unambiguously positive, political decentralization affects citizen’s satisfaction with education and health delivery in different ways. The influence of political decentralization, however, is highly contingent on whether we consider the capacity of the local or regional government to exercise authority over its citizens (self-rule) or to influence policy at the national level (shared-rule). Copyright Springer Science+Business Media Dordrecht 2015

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  • Luis Diaz-Serrano & Andrés Rodríguez-Pose, 2015. "Decentralization and the Welfare State: What Do Citizens Perceive?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 120(2), pages 411-435, January.
    • Handle: RePEc:spr:soinre:v:120:y:2015:i:2:p:411-435
    DOI: 10.1007/s11205-014-0599-5
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    2. Andrés Rodríguez-Pose & Vassilis Tselios, 2019. "Well-being, Political Decentralisation and Governance Quality in Europe," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 20(1), pages 69-93, January.
    3. Leonardo E. Letelier-S & José L. Sáez-Lozano, 2020. "Expenditure Decentralization: Does It Make Us Happier? An Empirical Analysis Using a Panel of Countries," Sustainability, MDPI, vol. 12(18), pages 1-17, September.
    4. Longjin Chen & Jian Huang & Jianjun Li, 2017. "Fiscal Decentralization, Satisfaction with Social Services, and Inequality Under the Hukou System," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(1), pages 377-394, May.
    5. 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.
    6. Duncan M. Wagana & Mike A. Iravo & Joyce D. Nzulwa & John M. Kihoro, 2016. "Effect of Financial and Political Decentralization on Service Delivery in County Governments in Kenya," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(6), pages 304-320, June.
    7. Andreas P. Kyriacou & Oriol Roca-Sagalés, 2019. "Local Decentralization and the Quality of Public Services in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(2), pages 755-776, September.
    8. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
    9. Dobrolyubova, Elena (Добролюбова, Елена), 2018. "Evaluation of the Effectiveness of Delegated Powers [Оценка Результативности И Эффективности Переданных Полномочий]," Working Papers 041839, Russian Presidential Academy of National Economy and Public Administration.
    10. Liangliang Liu, 2021. "Fiscal decentralization and the imbalance between consumption and investment in China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(1), pages 1-17, February.
    11. Qurat ul Ain & Tahir Yousaf & Yan Jie & Yasmeen Akhtar, 2020. "The Impact of Devolution on Government Size and Provision of Social Services: Evi¬dence from Pakistan," Hacienda Pública Española / Review of Public Economics, IEF, vol. 234(3), pages 105-135, September.
    12. Erlingsson, Gissur Ó, 2020. "A Stranger Thing? Sweden – The Upside Down of Multilevel Trust," Working Paper Series 1356, Research Institute of Industrial Economics.
    13. Liangliang Liu & Donghong Ding & Jun He, 2019. "The welfare effects of fiscal decentralization: a simple model and evidence from China," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(1), pages 417-434, January.
    14. Nakatani, Ryota & Zhang, Qianqian & Garcia Valdes, Isaura, 2023. "Health Expenditure Decentralization and Health Outcomes: The Importance of Governance," MPRA Paper 118062, University Library of Munich, Germany.
    15. Kyriacou, Andreas & Roca-Sagalés, Oriol, 2023. "Fiscal Decentralization and Health Care Access and Quality: Evidence from Local Governments Around the World," MPRA Paper 116860, University Library of Munich, Germany.
    16. Ryota Nakatani & Qianqian Zhang & Isaura Garcia Valdes, 2024. "Health Expenditure Decentralization and Health Outcomes: The Importance of Governance," Publius: The Journal of Federalism, CSF Associates Inc., vol. 54(1), pages 59-87.

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    More about this item

    Keywords

    Education; Health; Satisfaction; Fiscal and political decentralization; Europe;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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