who gives who receives and who wins transforming capital into political change through nongovernmental organizations how does international support for nongovernmental organizations ngos lead to political change in the developing world massive amounts of domestic government spending and international aid are now distributed through ngos instead of state bureaucracies recent scholarship suggests that this decentralization of developmental aid to ngos has unintended political effects on recipient communities but the mechanisms driving political effects are unclear in this article the authors test whether ngo type affects the results of ngo aid comparing the political impact of politicized and nonpoliticized ngos they do not find any difference between politicized and nonpoliticized ngos the results imply that to create political change ideological predispositions held by individual ngos are less important than is their ability to raise the level of social capital and civil society simply providing the infrastructure necessary to develop social capital and civil society can have a measurable political impact

the retrenchment hypothesis and the extension of the franchise in england and wales does an extension of the voting franchise always increase public spending or can it be a source of retrenchment we study this question in the context of public spending on health related urban amenities in a panel of municipal boroughs from england and wales in 1868 1871 and 1886 we find evidence of a u shaped relationship between spending on urban amenities and the extension of the local voting franchise our model of taxpayer democracy suggests that the retrenchment effect was related to enfranchisement of the middle class through nation wide reforms and that these reforms might have been pareto inferior in the average borough

local government spending and service delivery in indonesia the perverse effects of substantial fiscal resources abstractlocal government spending and service delivery in indonesia the perverse effects of substantial fiscal resources regional studies this study examines the impact of local government expenditure on service delivery in indonesia district spending positively influences education health and infrastructure service access but only up to a point after which the relationship becomes negative the quadratic spending effects disappear for districts managed by directly elected executives and those that perform well on their financial audits for these arguably less corrupt districts the impact of spending on services is positive across the entire range of expenditure the consistently beneficial impact of less corrupt district spending on service access is mitigated however by rising dependence on intergovernmental transfers

institutional solutions to the asymmetric information problem in health and development services for the poor summary the world s poorest pay for professional services and thus are in a market whether the services are provided in the public or private sectors the associated problems of unequal information are particularly acute in undergoverned countries where state regulation is weak we systematically review the evidence on solutions to these problems in a variety of professions payments by clients are more likely to have a positive effect on quality if they are made through locally managed organizations rather than directly to individual practitioners particularly if those organizations have an institutionalized history of other regarding values and incorporate client participation

elected leaders community and development evidence on distribution and agency from a case in india abstract although democratic decentralisation or community development by elected leaders is hypothesised to broaden development there is little evidence on just how elected leaders make distributional decisions and far less on how communities in turn shape their leaders decisions this study combines structural equation modelling with ethnography in india to investigate how leaders of elected local bodies called panchayats distribute development while quantitative findings reveal that democratic decentralisation mitigates elite capture ethnography gives insight into the role of political brokers in brokering development for votes widening distribution to non elite groups

natural disaster impacts and fiscal decentralization in recent years many developing countries have sought to implement more decentralized governmental systems despite efforts toward fiscal federalism assessment of decentralization activity has been hampered by lack of consistent cross country measures of effectiveness since governments play a central role in the management of catastrophic events disaster impact data provide an opportunity to evaluate whether government structure is important in limiting disaster losses we use cross country data over the 1970 2005 period to estimate the relationship between decentralization and disaster casualties countries with more decentralized governments experience fewer disaster induced fatalities jel h73 q54

do external grants to district governments discourage own revenue generation a look at local public finance dynamics in ghana summary using rich panel data on all of ghana s districts local public finances over 11 years this paper investigates the way that intergovernmental and other transfers to local governments affect local governments incentives to collect internally generated revenues and funds igf we find that despite an incentive scheme built into one of the major intergovernmental grants the flow of all grants taken together discourages rather than encourages igf this is reflected both in the depressing effect of transfers on igf levels as well as on igf growth

one size fits all decentralization corruption and the monitoring of bureaucrats summary the majority of theoretical and empirical studies on the relationship between decentralization and corruption argue that the devolution of power might be a feasible instrument for use in keeping corruption at bay we argue that this result crucially depends on the effectiveness of monitoring bureaucrats behavior the benefits of decentralization only occur if there is a supervisory body such as a free press which is often lacking in a substantial number of countries using cross country data we analyze the relationship between decentralization and corruption taking different degrees of the freedom of the press into account our main finding is that decentralization counteracts corruption in countries with high degrees of freedom of the press whereas countries without effective monitoring suffer from decentralization our policy implication is that a free press is a necessary pre condition for successful decentralization programs

decentralisation and accountability in infrastructure delivery in developing countries many developing countries are experimenting with decentralisation of public service delivery to elected local governments instead of bureaucrats appointed by a central government we study the resulting implications in a theoretical model in which the central government is uninformed about local need and unable to monitor service allocations bureaucrats charge bribes for services as monopoly providers resulting in underprovision of services especially for the poor local governments are directly responsive to their citizens needs but may be subject to capture by elites effects of decentralisation on service volumes efficiency and equity are analysed under different financing arrangements for local governments the theme of the 2004 world development report is summarised by its opening paragraph too often services fail poor people in access in quantity in quality but the fact that there are strong examples where services do work means governments and citizens can do better how by putting poor people at the center of service provision by enabling them to monitor and discipline service providers by amplifying their voice in policymaking and by strengthening the incentives for providers to serve the poor problems of accountability associated with traditional modes of delivery involving centralised bureaucracies include cost padding service diversion limited responsiveness to local needs limited access and high prices charged especially to the poor 1 many developing countries have thus begun to experiment with initiatives to increase accountability of service providers by providing greater control rights to citizen groups these include decentralisation of service delivery to local governments community participation direct transfers to households and contracting out delivery to private providers and ngos the programmes include a wide range of infrastructure services water sanitation electricity telecommunications roads and social services education health and welfare programmes countries where such trends have gathered

a comprehensive analysis of expenditure decentralization and of the composition of local public spending sacchi a and salotti s a comprehensive analysis of expenditure decentralization and of the composition of local public spending regional studies many industrialized countries have recently implemented fiscal decentralization reforms assigning more spending responsibility to sub national governments this paper investigates the causes of the decentralization of different categories of public expenditure in 19 developed countries over the period 1980 2006 different models for each of the spending functions under analysis are estimated adopting a general to specific empirical approach results confirm existing findings on the negative link between regional income disparities and expenditure decentralization a similarly negative relationship is found for a set of demographic variables leading to the conclusion that macroeconomic and more importantly political factors are responsible for the recent increase in decentralization finally the analysis is completed by a study of the factors driving sub n

capture and governance at local and national levels 135 despite the importance of this issue not much systematic research appears to have been devoted to assessing the relative susceptibility of national and local governments to interestgroup capture here we describe a model of two party electoral competition with probabilistic voting behavior and lobbying by specialinterest groups based on david baron 1994 and gene grossman and elhanan helpman 1996 that helps identify determinants of relative capture at different levels of government these include relative levels of voter awareness and interest group cohesiveness electoral uncertainty electoral competition heterogeneity of districts with respect to inequality and the electoral system while some of these uphold the traditional madisonian presumption others are likely to create a tendency for lower capture at the local level so the net effect is theoretically ambiguous this suggests that the extent of relative capture may be context specific and needs to be assessed empirically

fiscal federalism at work central responses to internal migration in india summary internal migration is thought to have substantial benefits for migrants and for the development of migrant sending and migrant receiving areas in order to facilitate such migration central governments may need to use fiscal transfers to ensure services to migrants address infrastructure shortfalls and ameliorate labor market displacement of natives in fact an extensive mostly normative fiscal federalism literature has argued that central governments ought to use transfers to reduce interjurisdictional externalities such as those due to population displacements we extend this literature empirically by examining the degree to which exogenous longterm migration prompts the redirection of central fiscal resources in india following the literature on distributive politics we argue that transfers in decentralized systems addressing the costs of population movements are influenced by partisan politics using monsoon shocks to migration we show that increases in migration are met with greater central transfers but that these flows are at least 50 greater if the state level executive is in the prime minister s political party consistent with the theory the influence of politics is greatest on parts of the budget subject to greater executive control this politicization may explain why indian states maintain barriers to internal migration despite the development costs of doing so

decentralization and political career concerns abstract politicians career paths often start at some subnational governments and end at the national one allocation of authorities among national and subnational governments affects i how tempting the prospects of taking national offices are and hence how strong bureaucrats political career concerns are and ii whether the incentives generated by these political career concerns can be put into productive use at subnational governments we illustrate this tradeoff in determining the optimal degree of decentralization using china as a case study we also compare the equilibrium degree of decentralization in autocracy and in democracy

regional state capacity and the optimal degree of fiscal decentralization abstract we study the optimal degree of fiscal decentralization in a federation regional governments are characterized by their abilities to deliver public goods administrative capacity and to raise tax revenues fiscal capacity two regimes are compared on efficiency grounds under partial decentralization regional governments rely on central bailouts to complete local projects in financing needs under full decentralization marginal financing is achieved via local capital taxes we show that the presence of sufficiently low levels of administrative capacity is a necessary condition for full decentralization dominance this condition may also be sufficient depending on the projects characteristics some extensions are presented

how do stakeholder interactions influence national food security policy in the caribbean the case of saint lucia abstract increasingly multi stakeholder processes have been recognized as being necessary to the development of public policies seeking to promote systemic innovation in response to complex and multidimensional challenges such as household food security rural development and environmental change saint lucia a small island developing state located in the caribbean has been grappling with a wide range of agriculture food and nutrition security challenges with varying degrees of policy success recognizing the significance of the challenge this paper explores the nature of the stakeholder interactions surrounding the development of saint lucia s 2009 2015 national agricultural policy and considers some of the implications for food and agriculture related policy outcomes results reveal a general lack of supportive conditions for effective multi stakeholder processes including low stakeholder participation levels conflicting roles of different forms of social capital in the interactions between stakeholders and missing boundary organizations capable of facilitating a transition towards more flexible and adaptive institutions enhanced knowledge exchange and learning and greater trust among stakeholders in the policy network future avenues for research and development are subsequently identified

who is at the wheel when communities drive development evidence from the philippines summary community driven development cdd approaches have become an important part of development operations using data from 1 200 households in 66 communities participating in a cdd project in the philippines we analyze how communities select their proposals and how resources are allocated across villages resources flow to the poorest and more politically active villages controlling for poverty more unequal villages are more likely to receive funding this surprising result is because in more unequal villages the elected village leader is more likely to override community preferences and to influence inter village competition such that project resources flow to their villages

how to achieve full electrification lessons from latin america electricity coverage in latin america has increased substantially in recent decades rising from 50 of the population in 1970 to more than 95 in 2015 growth however slowed in the 1990s as many countries experienced difficulties in extending their networks further in particular to serve those living in isolated and rural areas in spite of this the process of electrification was not interrupted and at the beginning of the 2010s decade most countries in the region were able to provide access to electricity to almost all of their populations in this paper we examine the main strategies used in latin america to increase coverage and argue that only a combination of policy efforts has made it possible to achieve the current situation we also examine the remaining obstacles at policy and institutional levels to achieving full coverage

competition among officials and the abuse of power traditional economic theory suggests that competition among officials providing government goods tends to reduce corruption however empirical evidence does not yet support this view in this paper i show that a corrupt and powerful central authority can use competition among officials to amass resources for itself while competition reduces corruption at the lower level of government corruption at the higher level of government is increased to avoid widespread theft from the central authority competing officials are monitored more intensively than a monopolist hence even though competition among officials generates more consumer surplus it may reduce welfare

decentralization and efficiency of subsidy targeting evidence from chiefs in rural malawi abstract lower income countries spend vast sums on subsidies beneficiaries are typically selected via either a proxy means test pmt or through a decentralized identification process led by local leaders a decentralized allocation may offer informational advantages but may be prone to elite capture we study this trade off in the context of two large scale subsidy programs in malawi for agricultural inputs and food decentralized to traditional leaders chiefs who are asked to target the needy using household panel data we find that nepotism exists but has only limited mistargeting consequences importantly we find that chiefs target households with higher returns to farm inputs generating an allocation that is more productively efficient than what could be achieved through strict poverty targeting this could be welfare improving since within village redistribution is common productive efficiency targeting is concentrated in villages with above median levels of redistribution

administrative overspending in indonesian districts the role of local politics summary we analyze the determinants of the excessive administrative spending of local governments in indonesia in an unbalanced panel data set of 399 districts for 2001 09 we show that the proliferation of districts has not led to increased administrative spending instead a lack of political accountability is responsible for this excess the degree of political competition influences the level of administrative spending significantly newly introduced direct elections of district heads however did not curtail the waste

racing to the bottom or to the top decentralization revenue pressures and governance reform in china summary china s decentralization has been praised for promoting inter jurisdictional competition that incentivizes local officials to promote economic development the downside of decentralization is that it enables these same local authorities to slow or block implementation of centrally mandated governance reforms especially when these may negatively affect local development goals we suggest that china s fiscal system and promotion system have created mismatched incentives that encourage cash strapped local authorities to disregard central governance reforms specifically we show that cities with weaker revenue bases were slower to implement new centrally mandated environmental transparency regulations additional evidence points to a bifurcation in development strategies in fiscally strong cities increased foreign investment leads to greater compliance in fiscally weak cities foreign investment is associated with decreased disclosure suggesting they aim to promote local development by becoming pollution havens similarly high levels of pollution induce fiscally strong cities to increase pollution disclosures while the opposite holds in fiscally weak cities these findings imply that mismatched decentralization policies can undermine other important governance reforms even ones that might be expected to be complementary to decentralizing initiatives

jointly produced exhaustible resources abstract natural resources are often produced jointly from composite ores which in turn are extracted from fixed reserve endowments in this paper market behavior is examined for such resources and it is shown how the price of each resource will depend on its demand and the demands and storage costs for the other resources present in the ore the measurement of resource scarcity is discussed and the effects of uncertainty over future resource demands are examined it is shown that the competitive market will still extract produce and store at socially optimal rates if firms are risk neutral and the average cost of storage is constant policy implications are noted particularly with reference to government stockpiling programs

the china growth miracle the role of the formal and the informal institutions this paper examines why china in spite of its ordinary institutions can grow so rapidly and for so long since each region in china has different quality of institutions and growth rates we look into provincial and city data for this investigation the variables formal and informal institutions are added into the conventional cross section growth equation the quality of the formal informal institution is taken from an opinion survey on the effectiveness of city governance conducted by the world bank in 2006 can be measured by the share of township and village enterprise in each province during 1978 2002 or by the trust index from surveys we conclude that it is the informal institution that drives the rapid growth in china further investigation using panel data and arellano bond system gmm estimator which controls for the missing fixed effect in cross provincial regressions and provides useful instrument confirms

does local school control raise student outcomes evidence on the roles of school autonomy and parental participation abstract school autonomy and parental participation have been frequently proposed as ways of making schools more productive less clear is how governments can foster decentralized decision making by local schools this article shows that across eight latin american countries most of the variation in local control over school decisions exists within and not between countries that implies that the exercise of local authority to manage schools is largely a local choice only modestly influenced by constitutional stipulations regarding jurisdiction over school personnel curriculum and facilities as a consequence estimated impacts of local school autonomy parental participation or school supplies on student performance must account for the endogeneity of local efforts to manage schools empirical tests confirm that local managerial effort by the principal and parents and the adequacy of school supplies are strongly influenced by parental human capital and the size and remoteness of the community and th

incentives to provide local public goods fiscal federalism russian style abstract based on a unique data set on russian city budgets this paper shows that revenue sharing between regional and local governments provides local governments with no incentive to increase tax base or provide public goods any change in local government s own revenues is almost entirely offset by changes in shared revenues this leads to governmental over regulation of private businesses it is shown that fiscal incentives are a determinant of the formation of private business and the efficiency of public goods provision the russian federalism is compared to the chinese federalism where fiscal incentives reputedly are stronger in many provinces

fiscal decentralization chinese style good for health outcomes summary this study analyzes the effect of fiscal decentralization on health outcomes in china using a panel data set with nationwide county level fiscal data we find that more fiscally decentralized provinces have lower infant mortality rates than provinces that are the main spending authority if certain conditions are met key among those conditions are the county governments own fiscal capacity and intergovernmental transfers local spending responsibilities need to be matched with county governments own fiscal capacity when the county s government relative spending responsibility is held constant the ability to spend on local public goods and health outcomes depend upon intergovernmental transfers

fiscal decentralization and development outcomes in india an exploratory analysis summary this paper attempts to quantify the impact of fiscal decentralization in india on its social infrastructure and on rural development overall the results in this paper indicate that government of india within a federal framework has been fostering development equitably across its states particularly through health and education expenditures aimed at improving human capital development in this context the importance of the two tier centre states decentralization should be noted however the third tier of local governance particularly the state rural local bodies decentralization has been dismal and has not achieved significant results across states which warrant the attention of the central and state governments

property tax revenues and multidimensional poverty reduction in colombia a spatial approach summary fiscal decentralization as an instrument to reduce poverty is an open debate that still takes place with little and contradictory empirical evidence regarding whether or not it has served the poor this paper focuses on analyzing the impact of municipalities per capita property tax revenues on multidimensional poverty in the colombian case this locally raised tax is used as an indicator of the state capacity that municipalities exercise when fiscal decentralization takes place to estimate its impact on poverty we control for the possible endogeneity biases that might affect this relationship while taking into account that multidimensional poverty exhibits strong spatial correlation among colombian municipalities we find statistically significant results that demonstrate a causal and diminishing effect of property tax revenues on the poverty headcount ratio and gap we also find that this effect has substantial spillovers across municipalities the findings of the paper highlight the need to strengthen subnational revenue systems through policy designs to increase locally raised revenues we simulate four different counterfactual scenarios to evaluate the potential effect of alternative policy designs on multidimensional poverty the results of these policy scenarios demonstrate that spatially differentiated policy schemes have greater effectiveness in reducing multidimensional poverty than geographically mute designs

decentralization of governance and development all around the world in matters of governance decentralization is the rage even apart from the widely debated issues of subsidiarity and devolution in the european union and states rights in the united states decentralization has been at the center stage of policy experiments in the last two decades in a large number of developing and transition economies in latin america africa and asia the world bank for example has embraced it as one of the major governance reforms on its agenda for example world bank 2000 burki perry and dillinger 1999 take also the examples of the two largest countries of the world china and india decentralization has been regarded as the major institutional framework for the phenomenal industrial growth in the last two decades in china taking place largely in the nonstate nonprivate sector india ushered in a landmark constitutional reform in favor of decentralization around the same time it launched a major program of economic reform in the early 1990s on account of its many failures the centralized state everywhere has lost a great deal of legitimacy and decentralization is widely believed to promise a range of benee ts it is often suggested as a way of reducing the role of the state in general by fragmenting central authority and introducing more intergovernmental competition and checks and balances it is viewed as a way to make government more responsive and efe cient technological changes have also made it somewhat easier than before to provide public services like electricity and water supply relatively efe ciently in smaller market areas and the lower levels of government have now a greater ability to handle certain tasks in a world of rampant ethnic cone icts and separatist movements decentralization is also regarded as a way of diffusing social and political tensions and ensuring local cultural and political autonomy these potential benee ts of decentralization have attracted a very diverse range

higher pay worse outcomes the impact of mayoral wages on local government quality in peru abstract in this paper i study how wages earned by local politicians affect local government quality to identify the effects i use caps imposed by the peruvian central government on mayoral wages as an excluded instrument the results show that mayoral wages do not improve government performance in particular there is a negative impact on public investment implementation and on performance goals set by the central government moreover there is no evidence of a positive effect on politician selection municipal bureaucratic capacity and political effort wages do strongly affect the local political landscape increasing political competition and reducing political support for the mayor these changes may help explain the drop in performance as local authorities may face more political obstacles when implementing their policy agenda overall the results show that higher politician wages need not improve local government quality

interest group politics in a federation the optimal degree of decentralization depends on the importance of inter state externalities of local policies we show that inter state externalities are determined by the spatial distribution of interest groups within the country interest groups who have multi state scope internalize inter state externalities to a larger extent than the lobbyists with interests within a single state we use variation in the geographic boundaries of politically powerful industrial interests to estimate the effect of inter state externalities on firm performance using firm level panel data from a peripheralized federation russia in 1996 2003 we show that controlling for firm fixed effects the performance of firms substantially improves with an increase in the number of neighboring regions under influence of multi regional business groups compared to the number influenced by local business groups our findings have implications for the literatures on federalism and on international trade as trade restrictions are a common source of inter state externalities

how does development assistance affect collective action capacity results from a field experiment in post conflict liberia social cooperation is critical to a wide variety of political and economic outcomes for this reason international donors have embraced interventions designed to strengthen the ability of communities to solve collective action problems especially in post conflict settings we exploit the random assignment of a development program in liberia to assess the effects of such interventions using a matching funds experiment we find evidence that these interventions can alter cooperation capacity however we observe effects only in communities in which by design both men and women faced the collective action challenge focusing on mechanisms we find evidence that program effects worked through improvements in mobilization capacity that may have enhanced communities ability to coordinate to solve mixed gender problems these gains did not operate in areas where only women took part in the matching funds experiment possibly because they could rely on traditional institutions unaffected by the external intervention the combined evidence suggests that the impact of donor interventions designed to enhance cooperation can depend critically on the kinds of social dilemmas that communities face and the flexibility they have in determining who should solve them

beyond good governance the multi level politics of health insurance for the poor in indonesia recent decentralization reforms in low and middle income countries have revived a long standing debate on the benefits and drawbacks of empowering local governments while some scholars highlight advances in local democratic accountability others emphasize the dangers of decentralized governance when democratic practices are poorly institutionalized this paper studies the case of health politics in indonesian local government to contend that the focus on democratic accountability and good governance may be insufficient to explain major policy outcomes associated with decentralization i show that the quality of local democracy affects health insurance policy during the first stages of the decentralization process however to understand policy trajectories over a longer time frame relations between politicians at different levels of government become the crucial factor using original qualitative and quantitative data from nearly 400 indonesian districts and provinces i find that regions in which cooperation between provincial and district authorities has emerged display systematically higher levels of health insurance coverage i explain why multi level cooperation improves local policy outcomes and i show that the positive effect of cooperation does not depend exclusively on patronage networks these findings contribute to the literature on decentralization and development by showing that policy cooperation across levels of government is crucial for the implementation of complex social policies and that multi level cooperation can have beneficial effects even when local democratic institutions are weak

grassroots organizations and ngos in rural development opportunities with diminishing states and expanding markets abstract this article undertakes to deal systematically with nongovernment organizations ngos and grassroots organizations gros usually treated as a residual category ten levels for development decision making and action are identified in the tradition of central place theory three of these are considered local or grassroots because of their collective action possibilities then three sectors are delineated instead of the usual two ngos are part of the collective action sector which differs from the public and private sectors in theoretically consistent ways a careful distinction is made between institutions and organizations usually conflated in the literature examples of accelerated rural development through grassroots organizations and ngos are discussed form asia africa and latin america

federalism as a commitment to reserving market incentives the authors advance a new perspective in the study of federalism their approach views federalism as a governance solution of the state to credibly preserving market incentives market incentives are preserved if the state is credibly prevented from compromising on future economic success and from bailing out future failures the salient features of federalism decentralization of information and authority and interjurisdictional competition help provide credible commitment or these purposes in addition the authors suggest that some federalism are self sustaining

decentralizing eligibility for a federal antipoverty program a case study for china in theory the informational advantage of decentralizing the eligibility criteria for a federal antipoverty program could come at a large cost to the program s performance in reaching the poor nationally whether this happens in practice depends on the size of the local income effect on the eligibility cutoffs china s di bao program provides a case study poorer municipalities adopt systematically lower thresholds roughly negating intercity differences in need for the program and generating considerable horizontal inequity so that poor families in rich cities fare better the income effect is not strong enough to undermine the program s overall poverty impact other factors including incomplete coverage of those eligible appear to matter more

information transmission and ownership consolidation in aid programs we investigate the degree of leeway donors of foreign aid should grant to recipient governments when their preferences over how to implement the aid are different and both the donor and recipient possess some private information about the most effective policies intuitively our model shows that donors should stay in control of how their aid is spent when their own private information is more important than the private information of the recipient less obviously an increase in the difference of preferences between donors and recipients can increase rather than decrease the leeway that donors should grant the recipients as the recipients information gains in importance relative to those of the donors and recipients become less likely to communicate truthfully we test the model using dyadic data for 28 bilateral aid donors and 112 recipients over the 1995 2010 period our proxy for centralized aid is project aid while budget aid leaves more leeway to the recipient and thus proxies for decentralized aid in line with the model misaligned interests and informational asymmetries indeed influence the shares of aid given as budget and project aid jel c23 d82 f33 o1

reshaping institutions evidence on aid impacts using a pre analysis plan this brief summarizes the results of a gender impact evaluation study entitled reshaping institutions evidence on aid impacts using a pre analysis plan conducted between 2005 and 2009 in sierra leone the study observed the impact of pre analysis plan pap on local institutions by imposing participation requirements for marginalized groups including women and test for learning by doing effects in sierra leone on the individual and village level requiring women and young adults to take on leadership positions participate in project meetings and sign off on project finances does not have any persistent effect on their participation in local decision making or attitudes regarding leadership ability the project successfully established village organizations and tools to manage the project the distributions of the project s benefits were equitable and leakage was minimal there was a significant positive impact on the stock and quality of local public infrastructure however there are no detectible changes in the ability to raise funds for local public goods decision making process or social norms and attitudes funding for the study derived from the gobifo project the institutional reform and capacity building project ircbp the world bank development impact evaluation dime the horace w goldsmith foundation the international growth center 3ie and the national bureau of economic research nber african successes project

targeting public goods to the poor in a segregated economy an empirical analysis of central mandates in rural india abstract while local governments are increasingly being vested with control over funds for public goods concern over the capture of decentralized funds by local elites has led decentralization to be combined with central mandates which require a certain proportion of funds to directly benefit the poor if local capture is pervasive however central mandates may not be effective despite the popularity of this combination of decentralization and centralized control there is little empirical evidence which separately identifies their effect on investment in public goods and hence assesses the effectiveness of central mandates this paper provides such evidence using data collected by the authors for the north indian state of punjab an economy where economic conditions facilitate such an analysis we find that central mandates are effective enhancing intra village equality in expenditure on public goods this finding informs the debate on the equity effects of centralized versus decentralized programs

do elected leaders in a limited democracy have real power evidence from rural china abstract do elected leaders in an authoritarian regime have any real power does grassroots democracy in a one party state entail parochial problems making use of primary survey data covering two election cycles in a mountainous area of china where an administrative village consists of several natural villages nvs we find that elected village heads favor their home nvs in resource allocations especially when these nvs have a large population in contrast the home nvs of appointed communist party secretaries do not receive disproportionately more resources on average this pattern of resource allocation is compatible with the interest of village heads and suggests that as elected leaders village heads have some true power in resource distribution

federal competition and economic growth abstract this paper exploits exogenous variation in the natural topography of the united states to estimate the causal impact of inter jurisdictional competition on income growth we find that doubling the number of county governments in a metropolitan area leads to a 17 increase in the average annual growth rate of earnings per employee over 1969 2006 and a 10 increase in 2006 income per employee decomposing income effects using 2000 census worker level data we find that approximately half of the effect stems from making workers more productive while the other half comes from changing the composition of the workforce and inducing workers to work more hours we also present evidence that inter jurisdictional competition leads local governments to raise more in taxes spend more and issue more debt per capita but does not help them obtain more inter governmental transfers however the additional cost from this increase in expenditures to a median wage employee is much smaller than the increase in that employee s wages due to greater inter jurisdictional competition

public education spending and private substitution in urban china abstract this paper documents robust evidence that increases in public spending on basic education are associated with significant reductions in household private tutoring spending in urban china this reduction comes primarily from the top and bottom income households suggesting multi dimensional demands for private tutoring it concentrates on households with an only boy and is larger for middle school than primary school children increases in public education spending are associated with significant reduction in school tuition which is homogeneous across households of different income levels changes in household spending on textbooks in response to more public education spending are modest but statistically insignificant

aid growth and devolution considering aid modality and different types of decentralization in this paper we provide further evidence on the relationship between decentralization and foreign aid effectiveness our previous work has shown that decentralization decreases aid effectiveness i e the impact of aid on economic growth is negative in decentralized countries however our previous work has not taken different types of aid and different types of decentralization into account which is at the heart of our current analysis we consider different measures of decentralization in particular measures of fiscal decentralization derived from government finance statistics and measures of political decentralization that are constructed based on countries constitutional rules in addition we take different types of aid into account grants loans technical assistance total net oda and we distinguish between multi lateral and bi lateral aid in order to consider differences in the donor structure our empirical analysis is based on panel data of up to 53 developing countries in our growth regressions we combine all types of decentralization with the different types of aid we find important differences between different types of decentralization i fiscal decentralization negatively affects aid effectiveness in line with our previous work ii employment decentralization may increase aid effectiveness and iii political decentralization does not hamper aid effectiveness or may even have positive effects

governance land and distribution a discussion on the political economy of community based conservation abstract the effectiveness of community based conservation cbc has been under discussion through the review of cbc initiatives in developing countries we contribute to the debate by analysing how players influence different factors that determine the outcomes of cbc we highlight several points first the promise of benefits has been overshadowed by constraints on the extraction of natural resources along with the use of governmental schemes to extract partially the rents from cbc which has left little to share inside the communities second cbc design and implementation has often overlooked the asymmetries of power within the community and at the individual level which has produced unequal access to the design decision making and outcomes of this activity third while the elites have had a determinant role in shaping the governance of cbc external agents promotion of cbc has tended to reproduce the existent negotiating power at the community local and national levels fourth land contestation plays a key role in the dynamics of relationship and conflict between the governments corporate interests and the communities finally cbc adaptation to new scenarios depends critically on the process of community empowerment and the building of networks with external agents

federalism and the soft budget constraint the government s incentives to bail out inefficient projects are determined by the trade off between political benefits and economic costs the latter depending on the decentralization of government two effects of federalism are derived first fiscal competition among local governments under factor mobility increases the opportunity costs of bailout and thus serves as a commitment device the competition effect second monetary centralization together with fiscal decentralization induces a conflict of interests and thus may harden budget constraints and reduce inflation the checks and balance effect the authors analysis is used to interpret china s recent experience of transition to a market economy copyright 1998 by american economic association

decentralized targeting of an antipoverty program abstract developing country governments often delegate authority over the targeting of antipoverty programs to community organizations while retaining control over how much goes to each community we offer a theoretical characterization of the information structure in such programs and the interconnected behavior of the various players our model motivates an econometric specification for explaining distributional outcomes results for bangladesh s food for education ffe program indicate that within village targeting improved with program size lower land inequality less remoteness fewer shocks and less private redistribution there is no sign that the center took account of village attributes conducive to reaching the poor

linkages between decentralisation and inequalities in neonatal health evidence from indonesia this study uses five waves of the indonesian demographic health surveys to analyse decentralisation and geographical inequality in health services delivery accounting for unobserved community level heterogeneity with random effects and correlated random effects models we link facility based birth delivery to the period of decentralisation and indonesia s major island groups using a pooled sample of 71 815 children we also generate direct estimates of neonatal mortality from 1990 to 2007 the results show that the implementation of decentralisation has accorded with a marked expansion in both health service and outcome inequalities in indonesia at least with respect to neonates systemic funding failures for health and decision space issues resulting from decentralisation are likely to have greater impact in disadvantaged regions where local capacity is weakest the need to address these fundamental issues to reduce inequalities and improve general health outcomes appears supportable

participation social capital and intersectoral problem solving african and asian cases abstract cooperation in policy program implementation between state and nongovernmental actors can sometimes solve intractable development problems but such cooperation must span gaps in culture power resources and perspective this article provides a comparative analysis of 13 cases of intersectoral cooperation among public agencies nongovernmental organizations grassroots groups and international donors the analysis reveals two successful implementation patterns nongovernment organization ngo mediated cooperation and grassroots centered cooperation different forms of social capital are central to the two patterns indigenous ngos with credibility across sectors are critical to the former while grassroots organizations are vital to the latter participatory decision making and mutual influence are essential to grassroots centered cooperation but less so for ngo mediated collaboration

state and development the need for a reappraisal of the current literature this essay tries to bring out some of the complexities that are overlooked in the usual treatment of the state in the institutional economics literature and supplement the latter with a discussion of some alternative approaches to looking at the possible developmental role of the state it refers to a broader range of development goals including the structural transformation of the economy and focuses on problems like the resolution of coordination failures and collective action problems the conflicting issues of commitment and accountability and the need for balancing the trade offs they generate some ingredients of state capacity and political coalition building usually missed in the literature the possible importance of rent sharing in a political equilibrium the advantages and problems of political centralization and decentralization and the multidimensionality of state functions that may not be addressed by markets or private firms

commitment in utility regulation a model of reputation and policy applications abstract this paper builds a dynamic model of utility regulation where a government cannot commit to a time inconsistent policy of not expropriating investment by allowing the government s type to change over time i explore how reputation concerns may generate partial commitment restricting attention to equilibria that are strongly renegotiation proof i show that there is a unique perfect bayesian equilibrium this contains episodes of investment and good behaviour followed by periods of expropriation and non investment i then apply the model to consider how the power of the incentive scheme and decentralization may influence the properties of this equilibrium in the case of the power of incentives the model suggests that price caps may worsen commitment in developing countries but not in developed ones similarly the model suggests that decentralisation is likely to have a significant effect on commitment but that this effect will depend on the general ability of the government to commit overall we conclude that the effect of such policies on commitment will be different across countries depending on the institutional environment

accountability and decentralisation in government an incomplete contracts model this paper approaches the question of the appropriate level of decentralisation of power in government as a problem in the allocation of control rights under incomplete contracts the model of the paper compares allocations of power to local central and regional government as alternative means of motivating governments to act in the interests of citizens centralisation allows benefits from policy coordination but has costs in terms of diminished accountability which can be precisely defined as the reduced probability that the welfare of a given region can determine the re election of the government the model is extended to allow for conflicts of interest within regions and externalities between central and local governments in a federation it is also applied to determining levels of fiscal transfer between localities and to circumstances where governments may act as leviathans appropriating resources for their own use

crossing party lines the eects of information on redistributive politics this paper explores how the quality of information available to voters in uences the choices they make in the polling booth and in turn aects the strategies of political parties competing for their support to do so the paper builds a model of redistributive politics under asymmetric information and then tests the resulting propositions with data from recent elections in sierra leone using the lindbeck and weibull 1987 model as a foundation i incorporate a new determinant of voting choice candidate quality which is only imperfectly observed by voters i show that voters with better information about candidates are more likely to cross ethnic party lines to support a high quality candidate furthermore since information encourages voters to consider characteristics like candidate charisma that are di cult for parties to observe it makes party forecasting of expected vote shares more uncertain such electoral uncertainty in turn induces parties to spread their resources more evenly across jurisdictions two institutional attributes of the empirical setting ethnicity based politics and decentralization enable direct tests of these informational propositions as well as a novel identi cation strategy for the classic swing voter hypothesis my results suggest that information could break the low accountability equilibrium in which citizens cast their votes blindly along partisan lines creating little incentive for political parties to invest in candidate quality or provide resources to areas outside the most tightly contested jurisdictions

incumbent behavior vote seeking tax setting and yardstick competition this paper develops a model of the political economy of tax setting in a multijurisdictional world where voters choices and incumbent behavior are determined simultaneously voters are assumed to make comparisons between jurisdictions to overcome political agency problems this forces incumbents into a yardstick competition in which they care about what other incumbents are doing we provide a theoretical framework and empirical evidence using u s state data from 1960 to 1988 the results are encouraging to the view that vote seeking and tax setting are tied together through the nexus of yardstick competition

decentralization and the productive efficiency of government evidence from swiss cantons advocates of fiscal decentralization argue that among other benefits it can increase the efficiency of delivery of government services this paper is one of the first to evaluate this claim empirically by looking at the association between expenditure decentralization and the productive efficiency of government using a data set of swiss cantons we first provide careful evidence that expenditure decentralization is a powerful proxy for legal local autonomy further panel regressions of swiss cantons provide robust evidence that more decentralization is associated with higher educational attainment we also show that these gains lead to no adverse effects across education types but that male students benefited more from educational decentralization closing for the swiss case the gender education gap

aid growth and devolution summary this paper examines whether the degree of fiscal decentralization in aid receiving countries matters in explaining aid effectiveness the decentralization theorem predicts that the devolution of powers should increase aid effectiveness since local decision makers are better informed about local needs thereby decentralization may also have reverse effects e g through coordination problems excessive regulation administrative costs and local capture we use panel data for up to 60 countries and find that aid contributes to economic growth in centralized developing economies whereas it is less effective or even harmful in decentralized countries the cases of indonesia the philippines and uganda support our findings our results imply that donor countries should carefully consider how the two development instruments foreign aid and decentralization interact

unpacking the effect of decentralized governance on routine violence lessons from indonesia summary we study the effect of decentralization on routine violence in indonesia we unpack decentralization along multiple dimensions and consider the individual effects of local elections the creation of new administrative units fiscal transfers and local public service delivery we use comprehensive data from indonesia s national violence monitoring system nvms a new dataset that records the incidence and impact of violence in indonesia we use these data to examine the relationship between the different dimensions of decentralization and different types of local violence in indonesian districts during 2001 10 our analyses suggest that there is a positive association between local service delivery and at least some forms of violence we argue that the positive effect of service delivery on violence is due to newly generated distributive conflicts among local ethnic groups around the control over and access to services by comparison district splitting and the introduction of direct elections of district heads are negatively associated with some forms of violence there is little evidence that fiscal transfers in general mitigate conflict

second generation fiscal federalism the implications of fiscal incentives abstract first generation fiscal federalism fgff studies the performance of decentralized systems under the assumption of benevolent social planners second generation fiscal federalism sgff studies performance based on the fiscal and political incentives facing subnational officials the paper focuses on three aspects of sgff first it considers the design of intergovernmental transfers while fgff emphasizes correcting vertical and horizontal equity sgff emphasizes the importance of fiscal incentives for producing local economic prosperity sgff extends fgff approaches by showing how non linear transfer systems can produce both equalization and high marginal fiscal incentives to produce local economic growth second the paper raises the fiscal incentive approach showing how different tax systems produce different fiscal incentives for political officials to choose policies third the paper discusses the interaction of democracy and fiscal federalism

regional inequalities fiscal decentralization and government quality abstractregional inequalities fiscal decentralization and government quality regional studies there are theoretical arguments supporting the view that regional income inequalities the degree of fiscal decentralization and the quality of government are simultaneously determined this article argues that existing empirical work has failed to deal adequately with this possibility in light of this it applies a simultaneous equation model which accounts for the joint determination of these three variables to a panel of 23 organisation for economic co operation and development oecd countries the empirical evidence that emerges from the analysis suggests that a process of fiscal decentralization accompanied by measures to improve the quality of government would be an effective strategy for reducing regional inequalities

democracy redistribution and political participation evidence from sweden 1919 1938 in this paper we compare how two different types of political regimes direct versus representative democracy redistribute income toward the relatively poor segments of society after the introduction of universal and equal suffrage swedish local governments are used as a testing ground since this setting offers a number of attractive features for a credible impact evaluation most importantly we exploit the existence of a population threshold which partly determined a local government s choice of democracy to implement a regression discontinuity design the results indicate that direct democracies spend 40 60 percent less on public welfare our interpretation is that direct democracy may be more prone to elite capture than representative democracy since the elite s potential to exercise de facto power is likely to be greater in direct democracy after democratization

benefit sharing among local resource users the role of property rights skewed distributions of benefits from natural resources can fuel social exclusion and conflict threatening sustainability this paper analyzes how user group property rights to harvest forest products affect the distribution of benefits from those products within user groups we argue that groups with recognized harvesting rights share benefits more equally among group members than groups without such rights we test this argument with data from 350 forest user groups in 14 developing countries our results suggest that securing harvesting rights for local user groups can contribute to more equal benefit sharing especially in ethnically homogenous groups

whither russia a review of andrei shleifer s a normal country in this review the author reflects on the heated debates around views about russia s postcommunist transition expressed in essays collected in new andrei shleifer s book a normal country russia after communism harvard university press 2005 which were initially published at different times during transition she focuses on the three questions that have been in the center of the debate among academics and policymakers what should the sequencing and the speed of reforms be should a country have political centralization for fiscal decentralization to be efficient is russia normal the author argues that russia s most recent history provides convincing evidence in support of the logic of political and economic transformation as it was understood by shleifer as early as the beginning of the 1990s

supporters or challengers the effects of nongovernmental organizations on local politics in bolivia how do nongovernmental organizations ngos affect local politics in developing democracies specifically do ngos have systematic effects on the fortunes of incumbent political parties in local elections existing work predicts starkly contradictory political effects some scholars claim that ngos most likely help incumbents by providing services for which politicians can claim credit whereas others believe that ngos most likely hurt incumbents by facilitating political opposition the authors argue that both of these effects are possible depending on the size of a jurisdiction s population in smaller populations the authors hypothesize that ngos facilitate collective action and decrease the ability of an incumbent to claim credit for projects larger jurisdictions water down the effect of ngos on collective action and permit incumbents credit claiming strong support is found for hypotheses using electoral sociodemographic and ngo data for all of 314 municipalities in bolivia

what determines access to piped water in rural areas evidence from small scale supply systems in rural brazil summary this paper investigates whether small scale water supply systems implemented and operated by water user associations increase access to piped water supply in rural brazil by more than systems by local governments starting from 15 to 16 in the year 2000 access rates in rural areas with water user associations increased to 33 4 in 2010 in areas with local government supply systems access rates only increased to 24 9 based on data from brazilian census and the national water and sanitation survey the empirical analysis in this paper shows that the observed difference is effectively due to project type choice additionally it points toward higher accountability as a potential reason for better results of community based projects in municipalities where social groups requested a new system before the local government started implementation and therefore public awareness for the project was higher the increase in access rates is comparable to the increase in municipalities with water user association projects the same is true if local media is present or political competition in local elections is higher as the effect of project type on access rates might be confounded by simultaneous drivers of project type choice and access rates the quantitative analysis is based on a difference in difference estimator in combination with kernel matching to overcome the endogeneity of project type the treatment effect revealed by this analysis is robust to various specification changes and the robustness checks show no structural differences between treatment and control groups that could bias the results the calculation of matching weights for the kernel matching is informed by semi structured interviews with academics and sector experts in brazil explaining the determinants of project choice the interviews highlight the political economy behind infrastructure expansion in rural brazil

mining conflict and the politics of obtaining a social license insight from guatemala mining as a development strategy has become ubiquitous throughout the developing world however if mining firms want to take advantage of the most mineral rich terrain in developing countries they must engage with the communities living near projected mining operations firms may sometimes use violence to quiet local opposition but increasingly they will seek a social license to operate this term refers not to the legal requirements firm must obtain such as governmental and environmental clearances but rather the elusive support of the affected local population that will help a firm avoid project delays maintain a positive public image and prevent further regulation of the mining industry there is a lack of research on how firms pursue a social license to operate through a qualitative case study of a mining conflict in guatemala this article addresses two questions first how do mining firms obtain a social license to operate in practice second what results from this process using a mix of qualitative data collected in 2009 2011 the article analyzes how a large guatemalan construction materials firm cementos progreso sought a social license to operate in the indigenous municipality of san juan sacatepequez guatemala and with what results an alliance of firm and state constructed new institutions for citizen participation in local governance promoted from within them the idea that mining was complementary with development and backed up this discourse with tangible results government transparency and accountability improved as did provision of basic services the findings suggest that the local state especially institutions designed to encourage citizen participation in local governance can play a crucial role in determining whether and how mining firms can operate

optimal control for transboundary pollution under ecological compensation a stochastic differential game approach abstract to account for previously ignored yet widely observed uncertainty in nature s capability to replenish the natural environment in ways that should inform ideal design of ecological compensation ec regimes this study constructs a stochastic differential game sdg model to analyze transboundary pollution control options between a compensating and compensated region equilibrium strategies in the stochastic two player game inform optimal control theory and reveal a welfare distribution mechanism to form the basis of an improved cooperative game contract a case based numerical example serves to verify the theoretical results and supports three key insights first accounting for various random disturbance factors the probabilistic pollutant stock in stackelberg non cooperative game exceeds that of a cooperative game situation second the ec mechanism provides long term effective incentives only when the marginal losses of environmental damage in the compensating region are more than twice that of the compensated region achieving a pareto optimal equilibrium relies upon the attainment of a dynamic allocation ratio derived from the analysis of a robust welfare allocation mechanism third cross region cooperation reliably outperforms stackelberg non cooperation due to either overwhelming incumbent economic interests or high abatement costs this study illuminates the importance of balancing both parties interests within an ec agreement while reducing uncertainty around unobserved environmental factors during ex ante negotiations