Decentralization and corruption - evidence across countries
The relationship between decentralization of government activities and the extent of rent extraction by private parties is an important element in the recent debate on institutional design. The theoretical literature makes ambiguous predictions about this relationship, and it has remained virtually unexamined by empiricists. The authors make a first attempt at examining the issue empirically, by looking at the cross-country relationship between fiscal decentralization and corruption as measured by a number of different indices. Their estimates suggest that fiscal decentralization in government spending is significantly associated with lower corruption. Moreover, they find that the origin of a country's legal system - for example, civil versus common legal code - performs extremely well as an instrument for decentralization. The estimated relationship between decentralization, when so instrumented, and corruption is even stronger. The evidence suggests a number of interesting areas for future work, including investigating whether there are specific services for which decentralized provision has a particularly strong impact on political rent extraction, and understanding the channels through which decentralization succeeds in keeping corruption in check.
|Date of creation:||29 Feb 2000|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
- Barro, R.J., 1989.
"Economic Growth In A Cross Section Of Countries,"
RCER Working Papers
201, University of Rochester - Center for Economic Research (RCER).
- Robert J. Barro & Jong-Wha Lee, 1993.
"International Comparisons of Educational Attainment,"
NBER Working Papers
4349, National Bureau of Economic Research, Inc.
- Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
- Banerjee, A.V., 1997. "A Theory of Misgovernance," Working papers 97-4, Massachusetts Institute of Technology (MIT), Department of Economics.
- Timothy Besley & Stephen Coate, 1999.
"Centralized versus Decentralized Provision of Local Public Goods: A Political Economy Analysis,"
NBER Working Papers
7084, National Bureau of Economic Research, Inc.
- Besley, Timothy J. & Coate, Stephen, 2000. "Centralized versus Decentralized Provision of Local Public Goods: a Political Economy Analysis," CEPR Discussion Papers 2495, C.E.P.R. Discussion Papers.
- Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
- Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
- Guido Tabellini, 2000.
"Constitutional Determinants of Government Spending,"
CESifo Working Paper Series
265, CESifo Group Munich.
- Guido Tabellini, . "Constitutional determinants of government spending," Working Papers 162, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Ades, Alberto & Di Tella, Rafael, 1997. "National Champions and Corruption: Some Unpleasant Interventionist Arithmetic," Economic Journal, Royal Economic Society, vol. 107(443), pages 1023-42, July.
- Pranab Bardhan & Dilip Mookherjee, 1998. "Expenditure Decentralization and the Delivery of Public Services in Developing Countries," Boston University - Institute for Economic Development 90, Boston University, Institute for Economic Development.
- Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, .
"The Quality of Government,"
19452, Harvard University OpenScholar.
- Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, 1998. "The Quality of Goverment," NBER Working Papers 6727, National Bureau of Economic Research, Inc.
- Andrei Shleifer & Robert W. Vishny, 1998. "The Quality of Government," Harvard Institute of Economic Research Working Papers 1847, Harvard - Institute of Economic Research.
- Banerjee, Abhijit V, 1997. "A Theory of Misgovernance," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1289-1332, November.
- Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank.
- . Pranab Bardhan and Dilip Mookherjee. Revised, 2000. "Decentralizing Anti-Poverty Program Delivery in Developing Countries" and C98-104.2 "Corruption and Decentralization of Infrastructure Delivery in Developing Countries," Center for International and Development Economics Research (CIDER) Working Papers C98-104.1, University of California at Berkeley.
- Alberto Alesina & Romain Wacziarg, 1997. "Openness, Country Size and the Government," NBER Working Papers 6024, National Bureau of Economic Research, Inc.
- Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
- Jin, Hehui & Qian, Yingyi & Weingast, Barry R., 2005.
"Regional decentralization and fiscal incentives: Federalism, Chinese style,"
Journal of Public Economics,
Elsevier, vol. 89(9-10), pages 1719-1742, September.
- Hehui Jin & Yingyi Qian & Barry Weingast, 1999. "Regional Decentralization and Fiscal Incentives: Federalism, Chinese Style," Working Papers 99013, Stanford University, Department of Economics.
- Pranab Bardhan & Dilip Mookherjee, 2000. "Corruption and Decentralization of Infrastructure Delivery in Developing Countries," Boston University - Institute for Economic Development 104, Boston University, Institute for Economic Development.
- International Monetary Fund, 1997. "Corruption and the Rate of Temptation: Do Low Wages in the Civil Service Cause Corruption?," IMF Working Papers 97/73, International Monetary Fund.
- Huther, Jeff & Shah, Anwar, 1998. "Applying a simple measure of good governance to the debate on fiscal decentralization," Policy Research Working Paper Series 1894, The World Bank.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:2290. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.