IDEAS home Printed from https://ideas.repec.org/p/phs/dpaper/201804.html
   My bibliography  Save this paper

Federalism and Inclusion in Developing Economies

Author

Listed:
  • Raul V. Fabella

    (School of Economics, University of the Philippines Diliman
    National Academy of Science and Technology)

  • Sarah Lynne S. Daway-Ducanes

    (School of Economics, University of the Philippines Diliman)

Abstract

Using two-step system-GMM on a panel data of 105 economies over the period 1987-2016, we present formal statistical evidence that Federalism is a strong predictor of greater income inequality in developing economies. It is also a strong predictor of higher poverty incidence and poverty severity on average for all countries. Federalism does not predict lower poverty incidence and severity in developing countries. Thus for a developing economy such as the Philippines, Federalism appears to be a leap from the frying pan into the fire of even greater income inequality and poverty incidence.

Suggested Citation

  • Raul V. Fabella & Sarah Lynne S. Daway-Ducanes, 2018. "Federalism and Inclusion in Developing Economies," UP School of Economics Discussion Papers 201804, University of the Philippines School of Economics.
  • Handle: RePEc:phs:dpaper:201804
    as

    Download full text from publisher

    File URL: https://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1517
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314, World Scientific Publishing Co. Pte. Ltd..
    2. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    3. Liyanage Devangi H. Perera & Grace H.Y. Lee, 2013. "Have Economic Growth And Institutional Quality Contributed To Poverty And Inequality Reduction In Asia?," Monash Economics Working Papers 37-13, Monash University, Department of Economics.
    4. Charles R. Hankla, 2009. "When is Fiscal Decentralization Good for Governance?," PPublius: The Journal of Federalism, Oxford University Press, vol. 39(4), pages 632-650, Fall.
    5. Perera, Liyanage Devangi H. & Lee, Grace H.Y., 2013. "Have economic growth and institutional quality contributed to poverty and inequality reduction in Asia?," MPRA Paper 52763, University Library of Munich, Germany.
    6. Patrick Honohan, 2004. "Financial development, growth, and poverty: how close are the links?," Policy Research Working Paper Series 3203, The World Bank.
    7. Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
    8. Jalilian, Hossein & Kirkpatrick, Colin, 2002. "Financial Development and Poverty Reduction in Developing Countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 7(2), pages 97-108, April.
    9. Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
    10. Barro, Robert J., 2008. "Inequality and Growth Revisited," Working Papers on Regional Economic Integration 11, Asian Development Bank.
    11. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Raul V. Fabella & Geoffrey Ducanes, 2019. "Power Industry Disruptors and Prospects of the Electricity Demand in the Greater Metro-Manila Area," UP School of Economics Discussion Papers 201901, University of the Philippines School of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alam, Ashraful & Uddin, Moshfique & Yazdifar, Hassan, 2019. "Institutional determinants of R&D investment: Evidence from emerging markets," Technological Forecasting and Social Change, Elsevier, vol. 138(C), pages 34-44.
    2. Chu, Lan Khanh & Hoang, Dung Phuong, 2020. "How does economic complexity influence income inequality? New evidence from international data," Economic Analysis and Policy, Elsevier, vol. 68(C), pages 44-57.
    3. Roberto Dell'Anno & Adalgiso Amendola, 2015. "Social Exclusion and Economic Growth: An Empirical Investigation in European Economies," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(2), pages 274-301, June.
    4. Alessandra Cepparulo & Juan Carlos Cuestas & Maurizio Intartaglia, 2017. "Financial development, institutions, and poverty alleviation: an empirical analysis," Applied Economics, Taylor & Francis Journals, vol. 49(36), pages 3611-3622, August.
    5. Clavijo-Cortes, Pedro & Campo-Robledo, Jacobo & Mendoza-Tolosa, Henry, 2019. "A Reassessment of the Relation Between Economic Growth and Maldistribution of Income," Working papers 25, Red Investigadores de Economía.
    6. Jakub Bartak & Łukasz Jabłoński, 2020. "Inequality and growth: What comes from the different inequality measures?," Bulletin of Economic Research, Wiley Blackwell, vol. 72(2), pages 185-212, April.
    7. Sakiru Adebola Solarin, 2022. "Modelling Two Dimensions of Poverty in Selected Developing Countries: The Impact of Fossil Fuel Subsidies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 160(1), pages 357-379, February.
    8. Canh, Nguyen Phuc & Thanh, Su Dinh, 2020. "Domestic tourism spending and economic vulnerability," Annals of Tourism Research, Elsevier, vol. 85(C).
    9. Andrew Berg & Jonathan D. Ostry & Charalambos G. Tsangarides & Yorbol Yakhshilikov, 2018. "Redistribution, inequality, and growth: new evidence," Journal of Economic Growth, Springer, vol. 23(3), pages 259-305, September.
    10. Kpodar, Kangni & Singh, Raju Jan, 2011. "Does financial structure matter for poverty ? evidence from developing countries," Policy Research Working Paper Series 5915, The World Bank.
    11. Canavire Bacarreza, Gustavo J. & Rioja, Felix, 2008. "Financial Development and the Distribution of Income in Latin America and the Caribbean," IZA Discussion Papers 3796, Institute of Labor Economics (IZA).
    12. Nguyen, Canh Phuc & Nasir, Muhammad Ali, 2021. "An inquiry into the nexus between energy poverty and income inequality in the light of global evidence," Energy Economics, Elsevier, vol. 99(C).
    13. Fawaz, Fadi & Rahnamamoghadam, Masha & Valcarcel, Victor, 2014. "A Refinement of the Relationship between Economic Growth and Income Inequality in Developing Countries," MPRA Paper 55268, University Library of Munich, Germany.
    14. Kouadio, Hugues Kouassi & Gakpa, Lewis-Landry, 2022. "Do economic growth and institutional quality reduce poverty and inequality in West Africa?," Journal of Policy Modeling, Elsevier, vol. 44(1), pages 41-63.
    15. González, Rosa Marina & Marrero, Gustavo A. & Rodríguez-López, Jesús & Marrero, Ángel S., 2019. "Analyzing CO2 emissions from passenger cars in Europe: A dynamic panel data approach," Energy Policy, Elsevier, vol. 129(C), pages 1271-1281.
    16. Sena Kimm Gnangnon, 2021. "Economic complexity and poverty in developing countries," Economic Affairs, Wiley Blackwell, vol. 41(3), pages 416-429, October.
    17. Isaac Appiah-Otoo & Na Song, 2021. "The Impact of Fintech on Poverty Reduction: Evidence from China," Sustainability, MDPI, vol. 13(9), pages 1-13, May.
    18. Gustavo A. Marrero & Juan Gabriel Rodríguez, 2019. "Inequality and growth: The cholesterol hypothesis," Working Papers 501, ECINEQ, Society for the Study of Economic Inequality.
    19. MacDonald, Ronald & Majeed, Muhammad Tariq, 2010. "Distributional and Poverty Consequences of Globalization: A Dynamic Comparative Analysis for Developing Countries," SIRE Discussion Papers 2010-62, Scottish Institute for Research in Economics (SIRE).
    20. Araujo, Jair Andrade & Marinho, Emerson & Campêlo, Guaracyane Lima, 2017. "Economic growth and income concentration and their effects on poverty in Brazil," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.

    More about this item

    Keywords

    federalism; poverty; inequality;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:phs:dpaper:201804. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/seupdph.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: RT Campos (email available below). General contact details of provider: https://edirc.repec.org/data/seupdph.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.