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Decentralization in Developing Economies

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  • Lucie Gadenne
  • Monica Singhal

Abstract

Standard models of fiscal federalism suggest many benefits of decentralization in developing economies, and there has been a recent push toward decentralization around the world. However, developing countries presently still have less decentralization, particularly on the revenue side, than both developed countries today and the United States and Europe historically. We consider how the trade-offs associated with fiscal federalism apply in developing countries and discuss reasons for their relatively low levels of decentralization. We also consider additional features relevant to federalism in developing economies, such as the prevalence of nongovernmental organizations and the role of social incentives in policy design.

Suggested Citation

  • Lucie Gadenne & Monica Singhal, 2013. "Decentralization in Developing Economies," NBER Working Papers 19402, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19402 Note: DEV PE POL
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    Cited by:

    1. Lucie Gadenne, 2017. "Tax Me, but Spend Wisely? Sources of Public Finance and Government Accountability," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 274-314, January.
    2. repec:eee:jcecon:v:45:y:2017:i:2:p:344-365 is not listed on IDEAS
    3. Kis-Katos, Krisztina & Sjahrir, Bambang Suharnoko, 2017. "The impact of fiscal and political decentralization on local public investment in Indonesia," Journal of Comparative Economics, Elsevier, pages 344-365.
    4. Jose Guimon, 2014. "Regional Inovation Policy and Multilevel Governance in Developing Countries," World Bank Other Operational Studies 23655, The World Bank.
    5. Smoke, Paul, 2016. "Looking Beyond Conventional Intergovernmental Fiscal Frameworks: Principles, Realities, and Neglected Issues," ADBI Working Papers 606, Asian Development Bank Institute.
    6. Leonardo Corral & Heath Henderson & Juan José Miranda, 2016. "Evidence from a Natural Experiment on the Development Impact of Windfall Gains: The Camisea Fund in Peru," IDB Publications (Working Papers) 7520, Inter-American Development Bank.
    7. Don Fullerton & Erich Muehlegger, 2017. "Who Bears the Economic Costs of Environmental Regulations?," CESifo Working Paper Series 6596, CESifo Group Munich.
    8. Golan, Jennifer & Sicular, Terry & Umapathi, Nithin, 2017. "Unconditional Cash Transfers in China: Who Benefits from the Rural Minimum Living Standard Guarantee (Dibao) Program?," World Development, Elsevier, vol. 93(C), pages 316-336.
    9. repec:eee:injoed:v:53:y:2017:i:c:p:12-27 is not listed on IDEAS

    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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