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Decentralisation and Poverty Reduction: A Conceptual Framework for the Economic Impact

  • Susan Steiner

    (Deutsches Übersee-Institut)

This paper contributes to providing insights into the impact of decentralisation on poverty. It starts out with an overview of which role decentralisation plays in strategies and policies for poverty eradication and derives economic and political impact channels. It concentrates on the economic channel, the reasoning of which is rooted in fiscal federalism theory. It shows that decentralisation cannot only influence poverty by assigning expenditure responsibility to lower levels of government but also by assigning tax-raising power, which has so far been neglected by the literature. The paper concludes by pointing out a number of possible risks for realising the poverty-reducing potential of decentralisation.

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File URL: http://econwpa.repec.org/eps/pe/papers/0508/0508006.pdf
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Paper provided by EconWPA in its series Public Economics with number 0508006.

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Length: 31 pages
Date of creation: 09 Aug 2005
Date of revision:
Handle: RePEc:wpa:wuwppe:0508006
Note: Type of Document - pdf; pages: 31
Contact details of provider: Web page: http://econwpa.repec.org

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  1. Gordon, Roger H, 1983. "An Optimal Taxation Approach to Fiscal Federalism," The Quarterly Journal of Economics, MIT Press, vol. 98(4), pages 567-86, November.
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  4. Seabright, Paul, 1996. "Accountability and decentralisation in government: An incomplete contracts model," European Economic Review, Elsevier, vol. 40(1), pages 61-89, January.
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  10. Robert E. B. Lucas, 1998. "Internal Migration and Urbanization: Recent Contributions and New Evidence," Boston University - Institute for Economic Development 91, Boston University, Institute for Economic Development.
  11. Burgess, Robin & Stern, Nicholas, 1993. "Taxation and Development," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 762-830, June.
  12. Pauly, Mark V., 1973. "Income redistribution as a local public good," Journal of Public Economics, Elsevier, vol. 2(1), pages 35-58, February.
  13. Ben Lockwood, 2002. "Distributive Politics and the Costs of Centralization," Review of Economic Studies, Oxford University Press, vol. 69(2), pages 313-337.
  14. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
  15. Boadway, Robin & Roberts, Sandra & Shah, Anwar, 1994. "Fiscal federalism : dimensions of tax reform in developing countries," Policy Research Working Paper Series 1385, The World Bank.
  16. Odd-Helge Fjeldstad, 2003. "What has trust got to do with it? Non-payment of service charges in local authorities in South Africa," CMI Working Papers WP 2003:12, CMI (Chr. Michelsen Institute), Bergen, Norway.
  17. Stephan Klasen, 2003. "In Search of The Holy Grail: How to Achieve Pro-Poor Growth ?," Ibero America Institute for Econ. Research (IAI) Discussion Papers 096, Ibero-America Institute for Economic Research.
  18. Galasso, Emanuela & Ravallion, Martin, 2000. "Distributional outcomes of a decentralized welfare program," Policy Research Working Paper Series 2316, The World Bank.
  19. Bird, Richard M., 1993. "Threading the Fiscal Labyrinth: Some Issues in Fiscal Decentralization," National Tax Journal, National Tax Association, vol. 46(2), pages 207-27, June.
  20. Inman, Robert P. & Rubinfeld, Daniel L., 1996. "Designing tax policy in federalist economies: An overview," Journal of Public Economics, Elsevier, vol. 60(3), pages 307-334, June.
  21. Roger H. Gordon & John D. Wilson, 1999. "Tax Structure and Government Behavior: Implications for Tax Policy," NBER Working Papers 7244, National Bureau of Economic Research, Inc.
  22. Sewell, David O, 1996. ""The Dangers of Decentralization" According to Prud'homme: Some Further Aspects," World Bank Research Observer, World Bank Group, vol. 11(1), pages 143-50, February.
  23. Vito Tanzi, 1998. "Fundamental Determinants of Inequality and the Role of Government," IMF Working Papers 98/178, International Monetary Fund.
  24. Deininger, Klaus & Mpuga, Paul, 2005. "Does Greater Accountability Improve the Quality of Public Service Delivery? Evidence from Uganda," World Development, Elsevier, vol. 33(1), pages 171-191, January.
  25. Johannes P. Jütting & Céline Kauffmann & Ida McDonnell & Holger Osterrieder & Nicolas Pinaud & Lucia Wegner, 2004. "Decentralisation and Poverty in Developing Countries: Exploring the Impact," OECD Development Centre Working Papers 236, OECD Publishing.
  26. Faguet, Jean-Paul, 2001. "Does decentralization increase responsiveness to local needs? - evidence from Bolivia," Policy Research Working Paper Series 2516, The World Bank.
  27. Shah, Anwar & Thompson, Theresa, 2004. "Implementing decentralized local governance: a treacherous road with potholes, detours, and road closures," Policy Research Working Paper Series 3353, The World Bank.
  28. Dilip Mookherjee & Pranab K. Bardhan, 2000. "Capture and Governance at Local and National Levels," American Economic Review, American Economic Association, vol. 90(2), pages 135-139, May.
  29. 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.
  30. Richard J. Cebula, 2009. "Migration and the Tiebout-Tullock Hypothesis," American Journal of Economics and Sociology, Wiley Blackwell, vol. 68(2), pages 541-551, 04.
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