IDEAS home Printed from https://ideas.repec.org/p/bos/iedwpr/dp-152.html
   My bibliography  Save this paper

Decentralization, Corruption and Government Accountability: An Overview

Author

Listed:
  • Pranab Bardhan

    (University of California at Berkeley)

  • Dilip Mookherjee

    (Institute for Economic Development, Boston University)

Abstract

The impact of government decentralization on economic performance and growth is a hotly contested issue. Waves of decentralization occurred in many developing countries over the past few decades, following the demise of a development paradigm in which centralized states played a leading role (see for instance, case studies of decentralization covering over half the world’s population in Bardhan and Mookherjee 2005b). The trends toward greater decentralization has been motivated by disenchantment with previous centralized modes of governance, owing partly to a perception that monolithic government bred high levels of rent-seeking, corruption and lack of accountability of government officials. An important research question, therefore, concerns the effects of decentralization on corruption. Can decentralization be a useful institutional reform to reduce corruption, or might corruption increase as political power shifts downward?

Suggested Citation

  • Pranab Bardhan & Dilip Mookherjee, 2005. "Decentralization, Corruption and Government Accountability: An Overview," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-152, Boston University - Department of Economics.
    • Handle: RePEc:bos:iedwpr:dp-152
    as

    Download full text from publisher

    File URL: http://www.bu.edu/econ/workingpapers/papers/Dilip%20Mookherjee/wp2005/decorr.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Chand, Sheetal K. & Moene, Karl O., 1999. "Controlling Fiscal Corruption," World Development, Elsevier, vol. 27(7), pages 1129-1140, July.
    2. Ariane Lambert-Mogiliansky & Konstantin Sonin & Ekaterina Zhuravskaya, 2003. "Capture of Bankruptcy: Theory and Russian Evidence," Working Papers w0038, Center for Economic and Financial Research (CEFIR).
    3. Christopher J. Waller & Thierry Verdier & Roy Gardner, 2002. "Corruption: Top Down or Bottom Up?," Economic Inquiry, Western Economic Association International, vol. 40(4), pages 688-703, October.
    4. G. Gulsun Arikan, 2004. "Fiscal Decentralization: A Remedy for Corruption?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 11(2), pages 175-195, March.
    5. Acemoglu, Daron & Verdier, Thierry, 1998. "Property Rights, Corruption and the Allocation of Talent: A General Equilibrium Approach," Economic Journal, Royal Economic Society, vol. 108(450), pages 1381-1403, September.
    6. Pranab Bardhan & Dilip Mookherjee, 1999. "Relative Capture of Local and Central Governments: An Essay in the Political Economy of Decentralization," Boston University - Institute for Economic Development 97, Boston University, Institute for Economic Development.
    7. Mookherjee, Dilip & Png, I P L, 1995. "Corruptible Law Enforcers: How Should They Be Compensated?," Economic Journal, Royal Economic Society, vol. 105(428), pages 145-159, January.
    8. Edwards, Jeremy & Keen, Michael, 1996. "Tax competition and Leviathan," European Economic Review, Elsevier, vol. 40(1), pages 113-134, January.
    9. Maria Ponomareva & Ekaterina Zhuravskaya, 2004. "Federal tax arrears in Russia Liquidity problems, federal redistribution or regional resistance?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(3), pages 373-398, September.
    10. Qian, Yingyi & Roland, Gerard, 1998. "Federalism and the Soft Budget Constraint," American Economic Review, American Economic Association, vol. 88(5), pages 1143-1162, December.
    11. Timothy Besley & Robin Burgess, 2002. "The Political Economy of Government Responsiveness: Theory and Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1415-1451.
    12. Mariano Tommasi & Federico Weinschelbaum, 1999. "A Principal-Agent Building Block for the Study of Decentralization and Integration," Working Papers 20, Universidad de San Andres, Departamento de Economia, revised Nov 1999.
    13. Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, vol. 89(4), pages 705-727, April.
    14. Olivier Blanchard & Andrei Shleifer, 2001. "Federalism With and Without Political Centralization: China Versus Russia," IMF Staff Papers, Palgrave Macmillan, vol. 48(4), pages 1-8.
    15. Timothy Besley & Rohini Pande & Lupin Rahman & Vijayendra Rao, 2004. "The Politics of Public Good Provision: Evidence from Indian Local Governments," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 416-426, 04/05.
    16. Nahum D. Melumad & Dilip Mookherjee & Stefan Reichelstein, 1995. "Hierarchical Decentralization of Incentive Contracts," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 654-672, Winter.
    17. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March.
    18. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and Corruption: Evidence from U.S. Federal Transfer Programs," Public Choice, Springer, vol. 113(1-2), pages 25-35, October.
    19. Jimenez, Emmanuel & Sawada, Yasuyuki, 1999. "Do Community-Managed Schools Work? An Evaluation of El Salvador's EDUCO Program," The World Bank Economic Review, World Bank, vol. 13(3), pages 415-441, September.
    20. James A. Robinson, 1999. "When is a State Predatory?," CESifo Working Paper Series 178, CESifo.
    21. Rebecca Menes, 2003. "Corruption in Cities: Graft and Politics in American Cities at the Turn of the Twentieth Century," NBER Working Papers 9990, National Bureau of Economic Research, Inc.
    22. Alwyn Young, 2000. "The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China," NBER Working Papers 7828, National Bureau of Economic Research, Inc.
    23. Nahum Melumad & Dilip Mookherjee & Stefan Reichelstein, 1997. "Contract Complexity, Incentives, and the Value of Delegation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 257-289, June.
    24. Bardhan, Pranab & Mookherjee, Dilip, 2006. "Pro-poor targeting and accountability of local governments in West Bengal," Journal of Development Economics, Elsevier, vol. 79(2), pages 303-327, April.
    25. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922, September.
    26. Irina Slinko & Ekaterina Zhuravskaya & Evgeny Yakovlev, 2005. "Laws for Sale: Evidence from Russia," American Law and Economics Review, American Law and Economics Association, vol. 7(1), pages 284-318.
    27. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Reserving Market Incentives," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 83-92, Fall.
    28. Poncet, Sandra, 2003. "Measuring Chinese domestic and international integration," China Economic Review, Elsevier, vol. 14(1), pages 1-21.
    29. Timothy Besley & Rohini Pande & Vijayendra Rao, 2005. "Participatory Democracy in Action: Survey Evidence from South India," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 648-657, 04/05.
    30. Estache, A., 1995. "Decentralizing Infrastructure. Advantages and Limitations," World Bank - Discussion Papers 290, World Bank.
    31. Zhuravskaya, Ekaterina & Ponomareva, Maria, 2004. "Federal Tax Arrears in Russia: Liquidity Problems, Federal Redistribution or Russian Resistance?," CEPR Discussion Papers 4267, C.E.P.R. Discussion Papers.
    32. Galiani, Sebastian & Gertler, Paul & Schargrodsky, Ernesto, 2008. "School decentralization: Helping the good get better, but leaving the poor behind," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2106-2120, October.
    33. 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.
    34. X. B. Zhao & L. Zhang, 1999. "Decentralization Reforms and Regionalism in China: A review," International Regional Science Review, , vol. 22(3), pages 251-281, December.
    35. Sonin, Konstantin, 2010. "Provincial protectionism," Journal of Comparative Economics, Elsevier, vol. 38(2), pages 111-122, June.
    36. Ritva Reinikka & Jakob Svensson, 2004. "Local Capture: Evidence from a Central Government Transfer Program in Uganda," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(2), pages 679-705.
    37. Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
    38. Sandra Poncet, 2004. "A Fragmented China," Tinbergen Institute Discussion Papers 04-103/2, Tinbergen Institute.
    39. J. Vernon Henderson & Ari Kuncoro, 2004. "Corruption in Indonesia," NBER Working Papers 10674, National Bureau of Economic Research, Inc.
    40. Raghabendra Chattopadhyay & Esther Duflo, 2004. "Women as Policy Makers: Evidence from a Randomized Policy Experiment in India," Econometrica, Econometric Society, vol. 72(5), pages 1409-1443, September.
    41. Faguet, Jean-Paul, 2004. "Does decentralization increase government responsiveness to local needs?: Evidence from Bolivia," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 867-893, March.
    42. Ritva Reinikka & Jakob Svensson, 2005. "Fighting Corruption to Improve Schooling: Evidence from a Newspaper Campaign in Uganda," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 259-267, 04/05.
    43. 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.
    44. Cai, Hongbin & Treisman, Daniel, 2004. "State corroding federalism," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 819-843, March.
    45. Cremer, Jaques & Estache, Antonio & Seabright, Paul & DEC, 1994. "The decentralization of public services : lessons from the theory of the firm," Policy Research Working Paper Series 1345, The World Bank.
    46. Gene M. Grossman & Elhanan Helpman, 1996. "Electoral Competition and Special Interest Politics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(2), pages 265-286.
    47. Melumad, Nahum & Mookherjee, Dilip & Reichelstein, Stefan, 1992. "A theory of responsibility centers," Journal of Accounting and Economics, Elsevier, vol. 15(4), pages 445-484, December.
    48. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
    49. Seabright, Paul, 1996. "Accountability and decentralisation in government: An incomplete contracts model," European Economic Review, Elsevier, vol. 40(1), pages 61-89, January.
    50. Abhijit Banerjee & Dilip Mookherjee & Kaivan Munshi & Debraj Ray, 2001. "Inequality, Control Rights, and Rent Seeking: Sugar Cooperatives in Maharashtra," Journal of Political Economy, University of Chicago Press, vol. 109(1), pages 138-190, February.
    51. Besley, Timothy & McLaren, John, 1993. "Taxes and Bribery: The Role of Wage Incentives," Economic Journal, Royal Economic Society, vol. 103(416), pages 119-141, January.
    52. Alwyn Young, 2000. "The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(4), pages 1091-1135.
    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. Albornoz, Facundo & Cabrales, Antonio, 2010. "Fiscal centralization and the political process," UC3M Working papers. Economics we100402, Universidad Carlos III de Madrid. Departamento de Economía.
    2. Nadia Fiorino & Emma Galli & Fabio Padovano, 2015. "How long does it take for government decentralization to affect corruption?," Economics of Governance, Springer, vol. 16(3), pages 273-305, August.
    3. Nadia Fiorino & Emma Galli & Fabio Padovano, 2013. "Do fiscal decentralization and government fragmentation affect corruption in different ways? Evidence from a panel data analysis," Chapters, in: Santiago Lago-Peñas & Jorge Martinez-Vazquez (ed.), The Challenge of Local Government Size, chapter 5, pages 121-147, Edward Elgar Publishing.
    4. Daniel Brou & Michele Ruta, 2013. "Rent-Seeking, Market Structure, and Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(3), pages 878-901, July.
    5. Samson Tiki & Belinda Luke & Janet Mack, 2021. "Perceptions of bribery in Papua New Guinea’s public sector: Agency and structural influences," Public Administration & Development, Blackwell Publishing, vol. 41(4), pages 217-227, October.
    6. Giorgio Brosio & Raju Jan Singh, 2014. "Revenue Sharing of Natural Resources in Africa : Reflections from a Review of International Practices," World Bank Publications - Reports 20062, The World Bank Group.
    7. Divya Datt, 2016. "Inter-governmental political relations in a federation and illegal mining of natural resources," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(4), pages 557-576, October.
    8. Julio, Juan Manuel & Lozano, Ignacio, 2016. "Descentralización fiscal y crecimiento económico en Colombia: evidencia de datos de panel a nivel regional," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    9. Ignacio Lozano-Espitia & Juan Manuel Julio-Román, 2015. "Descentralización Fiscal y Crecimiento Económico: Evidencia Regional en Panel de Datos para Colombia," Borradores de Economia 865, Banco de la Republica de Colombia.
    10. Cristian Barra & Anna Papaccio & Nazzareno Ruggiero, 2023. "Government effectiveness and inequality in Italian regions," Economic Change and Restructuring, Springer, vol. 56(2), pages 781-801, April.
    11. Budi Supriyatno, 2020. "Fiscal Decentralization of the Government of the City of Surabaya Indonesia," Modern Applied Science, Canadian Center of Science and Education, vol. 14(12), pages 1-1, December.
    12. Stojcic, Nebojsa & Suman Tolic, Meri, 2018. "Direct and indirect effects of fiscal decentralisation on economic growth," MPRA Paper 108762, University Library of Munich, Germany, revised May 2019.
    13. Machado, Fabiana, 2013. "Decentralization and Accountability: The Curse of Local Underdevelopment," IDB Publications (Working Papers) 4620, Inter-American Development Bank.
    14. Peter Shapland & Conny J. M. Almekinders & Annemarie Paassen & Cees Leeuwis, 2023. "An Ethnography of Endogenous Institutional Change in Community-Driven Development," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 35(6), pages 1465-1483, December.
    15. María Orduz, 2022. "Effect of educational spending on academic performance under different institutional arrangements," Documentos CEDE 20224, Universidad de los Andes, Facultad de Economía, CEDE.
    16. Paula Salinas & Albert Solé-Ollé, 2009. "Evaluating the effects of decentralization on educational outcomes in Spain," Working Papers 2009/10, Institut d'Economia de Barcelona (IEB).
    17. Jaime Bonet-Morón & Gerson Javier Pérez-Valbuena & Jorge Luis Montero-Mestre, 2018. "Las finanzas públicas territoriales en Colombia: dos décadas de cambios," Documentos de trabajo sobre Economía Regional y Urbana 267, Banco de la Republica de Colombia.
    18. Budi Supriyatno, 2021. "The Effect of Decentralization Policy in Improving Community Welfare Regional Government of Special Yogyakarta - Indonesia," Modern Applied Science, Canadian Center of Science and Education, vol. 15(1), pages 1-95, February.
    19. Azis Iwan J, 2011. "Endogenous Institution in Decentralization," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(2), pages 1-18, May.
    20. Keith Blackburn & Gareth Downing, 2015. "Deconcentration, Corruption and Economic Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 209, Economics, The University of Manchester.
    21. Kim, Aehyung, 2008. "Decentralization and the provision of public services : framework and implementation," Policy Research Working Paper Series 4503, The World Bank.
    22. Angelino Viceisza, 2007. "An experimental inquiry into the effect of yardstick competition on corruption," Experimental Economics Center Working Paper Series 2007-09, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
    23. Ivar Kolstad & Arne Wiig & Vincent Somville, 2014. "Devolutionary delusions? The effect of decentralization on corruption," CMI Working Papers 10, CMI (Chr. Michelsen Institute), Bergen, Norway.
    24. Shantiko, Bayuni, 2006. "Unfinished business: customary land individualization in olilit village, tanimbar islands," MPRA Paper 918, University Library of Munich, Germany.
    25. Kapoor Mudit & Ravi Shamika, 2012. "Determinants of Corruption: Government Effectiveness vs. Cultural Norms," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-26, August.

    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. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
    2. Sonin, Konstantin, 2010. "Provincial protectionism," Journal of Comparative Economics, Elsevier, vol. 38(2), pages 111-122, June.
    3. Keith Blackburn & Gareth Downing, 2015. "Deconcentration, Corruption and Economic Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 209, Economics, The University of Manchester.
    4. Enikolopov, Ruben & Zhuravskaya, Ekaterina, 2007. "Decentralization and political institutions," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2261-2290, December.
    5. Evgeny Yakovlev & Ekaterina Zhuravskaya, 2006. "State Capture in a Federation," Working Papers w0093, Center for Economic and Financial Research (CEFIR).
    6. Andreas Kyriacou & Oriol Roca sagalés, 2009. "Fiscal descentralization and the quality of government: evidence from panel data," Hacienda Pública Española / Review of Public Economics, IEF, vol. 189(2), pages 131-155, June.
    7. 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, vol. 45(2), pages 344-365.
    8. Grégoire ROTA-GRAZIOSI & Emilie CALDEIRA, 2014. "La décentralisation dans les pays en développement : une revue de la littérature - Decentralization in developing countries: A literature review," Working Papers 201411, CERDI.
    9. Bo, Shiyu, 2020. "Centralization and regional development: Evidence from a political hierarchy reform to create cities in china," Journal of Urban Economics, Elsevier, vol. 115(C).
    10. Pranab Bardhan, 2016. "State and Development: The Need for a Reappraisal of the Current Literature," Journal of Economic Literature, American Economic Association, vol. 54(3), pages 862-892, September.
    11. Emilie Caldeira & Grégoire Rota-Graziosi, 2015. "La décentralisation dans les pays en développement : une revue de la littérature - Decentralization in developing countries: A literature review," CERDI Working papers halshs-01005204, HAL.
    12. Mikael Priks, 2012. "Competition among officials and the abuse of power," Public Choice, Springer, vol. 150(3), pages 425-438, March.
    13. Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
    14. Krisztina Kis-Katos & Günther G. Schulze, 2013. "Corruption in Southeast Asia: a survey of recent research," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 27(1), pages 79-109, May.
    15. Yu-Bong Lai, 2016. "Does Tax Competition Reduce Corruption?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 63(4), pages 331-356, September.
    16. Emilie Caldeira & Martial Foucault & Grégoire Rota-Graziosi, 2014. "Does Decentralization Facilitate Access to Poverty-Related Services? Evidence from Benin," NBER Chapters, in: African Successes, Volume I: Government and Institutions, pages 57-102, National Bureau of Economic Research, Inc.
    17. Boggio, Margherita, 2011. "From Reluctant Privatization to Municipal Capitalism: an Overview on Ownership, Political Connections and Decentralization," MPRA Paper 46232, University Library of Munich, Germany.
    18. Sergei Guriev & Evgeny Yakovlev & Ekaterina Zhuravskaya, 2007. "Inter-Regional Trade and Lobbying," Working Papers w0100, New Economic School (NES).
    19. Lu Ming & Zhao Chen & Yongqin Wang & Yan Zhang & Yuan Zhang & Changyuan Luo, 2013. "China’s Economic Development," Books, Edward Elgar Publishing, number 14502.
    20. Nadia Fiorino & Emma Galli & Fabio Padovano, 2013. "Do fiscal decentralization and government fragmentation affect corruption in different ways? Evidence from a panel data analysis," Chapters, in: Santiago Lago-Peñas & Jorge Martinez-Vazquez (ed.), The Challenge of Local Government Size, chapter 5, pages 121-147, Edward Elgar Publishing.

    More about this item

    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:bos:iedwpr:dp-152. See general information about how to correct material in RePEc.

    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: Program Coordinator (email available below). General contact details of provider: https://edirc.repec.org/data/decbuus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.