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Fiscal Decentralization and the Mediating Role of Political Institutions

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  • Charles Hankla

    (International Center for Public Policy, Georgia State University)

  • Eunice Heredia-Ortiz

    (Ernst and Young)

  • Raul Ponce-Rodr’guez

    (Universidad Autonoma de Ciudad Juarez)

Abstract

Scholars have long understood the key role played by political institutions in mediating the impact of decentralization on critical governance outcomes. In this chapter, we review the scholarship on these relationships and present some conclusions and ways forward. We organize our analysis according to the specific decentralization outcomes considered by scholars, grouping them into the following categories: (1) nation-state integrity, (2) accountability, participation, and corruption, (3) social equity, (4) macro-fiscal performance, and (5) service delivery and public spending. On the independent variable side, we consider numerous types of institutions writ large, including: (1) institutions governing accountability and democracy, (2) institutions related to vertical relationships among tiers, (3) institutions determining horizontal relationships at subnational level, and (4) the structure and nationalization of parties and party systems. We conclude that, while recent scholarship has greatly expanded our understanding of how political institutions mediate fiscal federalism, there is still much to learn.

Suggested Citation

  • Charles Hankla & Eunice Heredia-Ortiz & Raul Ponce-Rodr’guez, 2025. "Fiscal Decentralization and the Mediating Role of Political Institutions," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper2510, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:ispwps:paper2510
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    File URL: https://icepp.gsu.edu/files/2025/06/paper2510.pdf
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