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On the 'economic dividend' of devolution

Author

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  • Andres Rodriguez-Pose
  • Nicholas Gill

Abstract

Rodriguez-Pose A. and Gill N. (2005) On the 'economic dividend' of devolution, Regional Studies 39 , 405-420. Recent political and academic discourse about devolution has tended to stress the economic advantages of the transfer of power from national to subnational institutions. This 'economic dividend' arises through devolved administrations' ability to tailor policies to local needs, generate innovation in service provision through inter-territorial competition, and stimulate participation and accountability by reducing the distance between those in power and their electorates. This paper, however, outlines two related caveats. First, there are many forces that accompany devolution and work in an opposite direction. Devolved governmental systems may carry negative implications in terms of national economic efficiency and equity as well as through the imposition of significant institutional burdens. Second, the economic gains, as well as the downsides, that devolution may engender are contingent, to some extent, upon which governmental tier is dominating, organizing, propagating and driving the devolutionary effort.

Suggested Citation

  • Andres Rodriguez-Pose & Nicholas Gill, 2005. "On the 'economic dividend' of devolution," Regional Studies, Taylor & Francis Journals, vol. 39(4), pages 405-420.
  • Handle: RePEc:taf:regstd:v:39:y:2005:i:4:p:405-420
    DOI: 10.1080/00343400500128390
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    References listed on IDEAS

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    1. Jing Jin & Heng-fu Zou, 2003. "Soft Budget Constraints on Local Government in China," CEMA Working Papers 132, China Economics and Management Academy, Central University of Finance and Economics.
    2. Scott, Allen J., 1999. "Regions and the World Economy: The Coming Shape of Global Production, Competition, and Political Order," OUP Catalogue, Oxford University Press, number 9780198296584.
    3. Agarwala, R., 1992. "China: Reforming Intergovernmental Fiscal Relations," World Bank - Discussion Papers 178, World Bank.
    4. Jeni Klugman, 1994. "Decentralization: A Survey of Literature from a Human Development Perspective," Human Development Occasional Papers (1992-2007) HDOCPA-1994-05, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    5. Jonathan A. Rodden & Gunnar S. Eskeland (ed.), 2003. "Fiscal Decentralization and the Challenge of Hard Budget Constraints," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262182297, January.
    6. International Monetary Fund, 2001. "Fiscal Decentralization and Governance; A Cross-Country Analysis," IMF Working Papers 01/71, International Monetary Fund.
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    More about this item

    Keywords

    Devolution; Economic development; Efficiency; Equity; Institutions; Economic governance; Decentralisation; Developpement economique; Efficience; Equite; Institutions; Gouvernement economique; Machtubertragung; Wirtschaftliche Entwicklung; Leistung; Fairness; Institutionen; Wirtschaftliche Regierungsgewalt; Descentralizacion; Desarrollo economico; Eficiencia; Capital patrimonial; Instituciones; Gobernanza economica; JEL classifications: H77; O18; R51; R58;

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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