Location of Repository

Does decentralization matter for regional disparities? A cross-country analysis

By Roberto Ezcurra and Andrés Rodríguez-Pose

Abstract

This paper looks at the relationship between fiscal and political decentralization and the evolution of regional inequalities in a panel of 26 countries – 19 developed and 7 developing – for the period between 1990 and 2006. Using an instrumental variables method, it finds that whereas for the whole sample decentralization is completely dissociated for the evolution of regional disparities, the results are highly contingent on the level of development, the existing level of territorial inequalities, and the fiscal redistributive capacity of the countries in the sample. Decentralization in high income countries has, if anything, been associated with a reduction of regional inequality. In low and medium income countries, fiscal decentralization has been associated with a significant rise in regional disparities, which the positive effects of political decentralization have been unable to compensate. Policy preferences by subnational governments for expenditure in economic affairs, education, and social protection have contributed to this trend

Topics: G Geography (General), HC Economic History and Conditions
Publisher: Spatial Economics Research Centre (SERC), London School of Economics and Political Science
Year: 2009
OAI identifier: oai:eprints.lse.ac.uk:33244
Provided by: LSE Research Online

Suggested articles

Preview

Citations

  1. (1956). A pure theory of local expenditures. doi
  2. (1999). Agglomeration and economic development: Import substitution vs. trade liberalisation, doi
  3. (2000). Agglomeration and regional imbalance: Why? And is it bad?,
  4. (1999). An essay on fiscal federalism, doi
  5. (1999). Beyond the Center: Decentralizing the State. Washington D.C.: doi
  6. (2002). Brazil. Issues on fiscal federalism, Brazil Country Management Unit Report 22523-BR.
  7. (2003). Bridging the economic divide within countries: A scorecard on the performance of regional policies in reducing regional income disparities, doi
  8. (2002). Can we discern the effect on globalization on income distribution? Evidence from household budget surveys, World Bank Policy Research Working Paper 2876. doi
  9. (2002). Centripetal forces in china's economic takeoff. doi
  10. (1991). Convergence across states and regions, doi
  11. (1999). Convergence and divergence across Italian regions, doi
  12. (1992). Convergence, doi
  13. (2002). Decentralization in Africa: A Stocktaking Survey. Africa Region Working Paper Series,
  14. (1997). Decentralization in Mexico: From Reforma Municipal to Solidaridad to Nuevo Federalismo. doi
  15. (2002). Decentralization of governance and development, doi
  16. (2003). Decentralization: conceptualization and measurement, doi
  17. (1993). Decomposition of China’s Regional Inequalities, doi
  18. (1999). Development and democracy in India. doi
  19. (2005). Devolution and regional disparities in the Philippines: is there a connection?, Environment and Planning C: Government and Policy, doi
  20. (1997). Disunited States. doi
  21. (2002). Econometric Analysis of Cross Section and Panel Data. doi
  22. (2003). Econometric Analysis, Third Edition.
  23. (2001). Economic growth and income inequality in Brazil, doi
  24. (1995). Economic Growth. doi
  25. (1967). Economics and Information Theory. doi
  26. (2002). Economics of Agglomeration. Cambridge: doi
  27. (1996). Estimating the demand for public goods: The collective choice and contingent valuation approaches.
  28. (1985). Ethnic Groups in Conflict. doi
  29. (1997). Federalism as a commitment to preserving market incentives, doi
  30. (2005). Fifty years of regional inequality in China: a journey through central planning, reform, and openness, doi
  31. (1993). Fiscal decentralization and economic development, doi
  32. (2003). Fiscal decentralization and economic growth, doi
  33. (1998). Fiscal decentralization and economic growth: a cross country study, doi
  34. (1995). Fiscal decentralization and growing regional disparities in rural China: Some evidence in the provision of rural services, doi
  35. (2008). Fiscal decentralization and regional disparities: Evidence from several European Union countries, doi
  36. (2006). Fiscal decentralization and regional income disparities: Evidence from the Colombian experience, doi
  37. (1999). Fiscal management in federal democracies: Argentina and Brazil. World Bank Policy Research Working Paper 2121. doi
  38. (2008). From identity to the economy: analysing the evolution of the decentralisation discourse, Environment and Planning C: Government and Policy, doi
  39. (2001). Globalization and Inequality: Evidence from Within China. doi
  40. (2008). Globalization, inequality, and local-level dynamics: Indonesia and the Philippines, doi
  41. (2005). Growth, integration and regional inequality in Europe, doi
  42. (2006). How does trade affect regional disparities?, doi
  43. (2003). Incentives, choice, and accountability in the provision of public services, doi
  44. (2007). Inequality and the territorial fragmentation of solidarity, doi
  45. (1996). Intergovernmental Relations and Economic Management in doi
  46. (1996). Intergovernmental Relations and Economic Management in China. doi
  47. (2004). Is there a global link between regional disparities and devolution?, doi
  48. (1997). Market-preserving fiscal federalism in the American Monetary Union. doi
  49. (1995). Measuring Inequality, Second Edition,
  50. (1995). Measuring Inequality, Second Edition, LSE Handbooks in Economics. London: Prentice Hall. 37 Dabla-Norris,
  51. (2008). Measuring Regional Authority, doi
  52. (1989). Metropolitan concentration in developing countries, doi
  53. (1999). New Federalism and State Government in Mexico: Bringing the States Back In, A.S.-Mexican Policy Report 9, doi
  54. (1973). On Economic Inequality . Oxford: doi
  55. (2005). On the “economic dividend” of devolution, doi
  56. (1995). On the dangers of decentralization, World Bank Policy Research Working Paper 1252. doi
  57. (2002). On the measurement and impact of fiscal decentralization, World Bank Policy Research Working Paper 2809. doi
  58. (2008). Operationalizing Regional Authority: A Coding Scheme for 42 Countries, 1950-2006, Regional and Federal Studies, doi
  59. (2001). Patterns of regional inequality in transition economies, doi
  60. (2005). Public sector decentralisation: Measurement concepts and recent international trends, doi
  61. (2004). Regional economic disparities and decentralization, doi
  62. (1995). Regional income inequality variations in China,
  63. (1965). Regional inequality and the process of national development: A description of patterns, doi
  64. (2003). Rethinking Federalism: Changing Power Relations Between the Center and the States, Publius: doi
  65. (1985). Searching for Leviathan: An empirical analysis,
  66. (2007). Spatial disparities in productivity in Central and Eastern Europe, doi
  67. (2005). Spatial diversity in local government revenue effort under decentralization: a neural-network approach, Environment and Planning C: Government and Policy, doi
  68. (1998). Territorial Competition: Some Lessons for Policy, doi
  69. (1996). The Brazilian fiscal system in the 1990s: Equity and efficiency under inflationary condition. doi
  70. (2001). The break-up of Indonesia? Nationalisms after decolonisation and the limits of the nation-state in post-cold war Southeast Asia, Third World Quarterly, doi
  71. (2006). The challenge of fiscal decentralization in transition countries, doi
  72. (1992). The dynamics of secession, doi
  73. (1995). The economic role of political institutions: Market-preserving federalism and economic growth, doi
  74. (2002). The English question: regional perspectives on a fractured nation, doi
  75. (2001). The Federalization of Spain, The Cass series in regional and federal studies 5. doi
  76. (2009). The link between devolution and regional disparities: evidence from the Italian regions, Environment and Planning A advance online publication, doi
  77. (1998). The new regionalism in Western Europe: territorial restructuring and political change. doi
  78. (2007). The Political Economy of India’s Federal System and its Reform, doi
  79. (2009). The state and uneven development, doi
  80. (2008). The tradeoff between growth and equity in decentralization policy: China's experience, doi
  81. (2000). The World Development Report 1999/2000. Entering the 21st Century. doi
  82. (2001). Trade policy and regional inequalities, doi
  83. (1996). Trade policy and the third world metropolis, doi
  84. (2004). Trade, growth and poverty, doi
  85. (1988). Unbalanced regional growth and regional income inequality in the latter stages of development, doi
  86. (2008). Validation of the Regional Authority Index, doi
  87. (1998). What’s new about the new economic geography?, doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.