Does the system of allocation of intergovernmental transfers in Senegal eliminate politically motivated targeting?

While there is a large body of literature on the determinants of allocation of intergovernmental …fiscal transfers in developed countries, this kind of study is still very limited for developing countries, especially Subsaharan countries. Using an original micro-level public fi…nance panel data from Senegal, we address three issues: (1) Does the Senegalese allocation system of …fiscal transfers conform to the guidance of the normative theory, in particular, to the equity principle? (2) Does this allocation system eliminate the politically motivated targeting of transfers? (3) If not, what kind of political factors explain the horizontal allocation of resources? By estimating a panel data for 67 local gov- ernments ("communes"), from 1997 to 2009, we fi…nd that equity concerns do not affect the allocation of intergovernmental transfers in Senegal, leading to the conclusion that the resources distribution system does not comply with the dictates of normative theory. Moreover, we …find evidence that political considerations influence the horizontal allocation of …fiscal transfers. In particular, our analysis suggests that transfers allocation follows a pattern of tactical redistribution more than patronage, swing communes being targeted while partisan communes are not.decentralization;political economy;Intergovernmental transfers;senegal

Yardstick competition in a Federation: Theory and Evidence from China

While some scholars argue that fiscal decentralization gave Chinese local officials strong incentives to promote local economic growth, traditional fiscal federalism theories are not directly relevant to explain such an effect in the particular context of China. In this paper, we explain the existence of interjurisdictional competition among Chinese local officials using a model of yardstick competition "from the top", in which the central government (and not local voters) creates a competition among local officials by rewarding or punishing them on the basis of relative economic performance. Our model predicts that, in this context, local governments are forced to care about what other incumbents are doing and that public spending settings are strategic complements. Then, by estimating a spatial lag dynamic model for a panel data of 29 Chinese provinces from 1980 to 2004, we provide empirical evidence of the existence of such public spending interactions. We propose a rigorous empirical framework which takes into account heterogeneity, simultaneity and endogeneity problems and spatial error dependence. The results are encouraging to the view that there are some strategic interactions among Chinese provinces, resulting from a yardstick competition created by the central government.decentralization;China;public spending interactions;yardstick competition;spatial panel data

Does the system of allocation of intergovernmental transfers in Senegal eliminate politically motivated targeting?

While there is a large body of literature on the determinants of allocation of intergovernmental …fiscal transfers in developed countries, this kind of study is still very limited for developing countries, especially Subsaharan countries. Using an original micro-level public fi…nance panel data from Senegal, we address three issues: (1) Does the Senegalese allocation system of …fiscal transfers conform to the guidance of the normative theory, in particular, to the equity principle? (2) Does this allocation system eliminate the politically motivated targeting of transfers? (3) If not, what kind of political factors explain the horizontal allocation of resources? By estimating a panel data for 67 local gov- ernments ("communes"), from 1997 to 2009, we fi…nd that equity concerns do not affect the allocation of intergovernmental transfers in Senegal, leading to the conclusion that the resources distribution system does not comply with the dictates of normative theory. Moreover, we …find evidence that political considerations influence the horizontal allocation of …fiscal transfers. In particular, our analysis suggests that transfers allocation follows a pattern of tactical redistribution more than patronage, swing communes being targeted while partisan communes are not.decentralization, political economy, Intergovernmental transfers, senegal

Does the system of allocation of intergovernmental transfers in Senegal eliminate politically motivated targeting?

While there is a large body of literature on the determinants of allocation of intergovernmental fiscal transfers in developed countries, this kind of study is still very limited for developing countries, especially Subsaharan countries. Using an original micro-level public finance panel data from Senegal, we address three issues: (1) Does the Senegalese allocation system of fiscal transfers conform to the guidance of the normative theory, in particular, to the equity principle? (2) Does this allocation system eliminate the politically motivated targeting of transfers? (3) If not, what kind of political factors explain the horizontal allocation of resources? By estimating a panel data for 67 local gov- ernments ("communes"), from 1997 to 2009, we find that equity concerns do not affect the allocation of intergovernmental transfers in Senegal, leading to the conclusion that the resources distribution system does not comply with the dictates of normative theory. Moreover, we find evidence that political considerations influence the horizontal allocation of fiscal transfers. In particular, our analysis suggests that transfers allocation follows a pattern of tactical redistribution more than patronage, swing communes being targeted while partisan communes are not

Decentralization in Africa and the nature of local governments' competition: evidence from Benin

Without denying particular dimensions of the decentralisation in Sub-Saharan countries, this paper applies standard reasoning from the fiscal federalism literature to a developing country and tests the existence of strategic interactions among local Beninese governments, called 'communes'. We first propose a two-jurisdiction model of public expenditure interactions, considering a constrained Nash equilibrium to capture the extreme poverty of some communes. We show that spillovers among jurisdictions involve strategic behaviours of local officials who have sufficient levels of fiscal resources. Second, by estimating a spatial lag model, our analysis provides evidence for the presence of strategic interactions in Benin, contingent on 'communes fiscal autonomy. Such interactions arise among communes which are geographically or ethnically close. We also highlight both an opportunistic behaviour of local governments before local elections and an effect of partisan affiliations. This African democracy appears to be as concerned as developed democracies with strategic fiscal interactions.Fiscal interactions;benin;decentralisation;local government;dynamic panel data

Decentralization in Africa and the nature of local governments' competition: evidence from Benin

Without denying particular dimensions of the decentralisation in Sub-Saharan countries, this paper applies standard reasoning from the fiscal federalism literature to a developing country and tests the existence of strategic interactions among local Beninese governments, called 'communes'. We first propose a two-jurisdiction model of public expenditure interactions, considering a constrained Nash equilibrium to capture the extreme poverty of some communes. We show that spillovers among jurisdictions involve strategic behaviours of local officials who have sufficient levels of fiscal resources. Second, by estimating a spatial lag model, our analysis provides evidence for the presence of strategic interactions in Benin, contingent on 'communes fiscal autonomy. Such interactions arise among communes which are geographically or ethnically close. We also highlight both an opportunistic behaviour of local governments before local elections and an effect of partisan affiliations. This African democracy appears to be as concerned as developed democracies with strategic fiscal interactions.Fiscal interactions, benin, decentralisation, local government, dynamic panel data

ESSAIS SUR LA DÉCENTRALISATION DANS LES PAYS EN DEVELOPPEMENT

To improve the efficiency of the public sector, a decentralization process has been engaged in a large number of developing countries. This thesis, in four parts, analyzes various aspects of decentralization in developing countries. Part 1, which consists in a review of literature, studies the expected theoretical effects of decentralization, examines their relevance in the particular context of developing countries and, draws up a critical assessment of empirical studies evaluating the existence of such effects (chapter 1). Part 2 focuses on the relevance of an essential argument in favor of decentralization, largely ignored in studies on developing countries: the "competition principle". More precisely, we analyze the existence of strategic interactions between local governments in a context of weak fiscal resources (case of Benin, chapter 2) and in the absence of local democracy (case of China, chapter 3). Part 3 relates to the vertical relationship between the central government and local governments. In particular, we focus on the effect of central fiscal transfers on the level of local own-revenue in Benin (chapter 4) and on the determinants of the allocation of fiscal transfers between local governments in Senegal (chapter 5). Finally, in part 4, we determine the average and distributional impacts of decentralization on the access to basic services by local population (chapter 6).Visant à redéfinir le rôle du secteur public et à améliorer ses performances, un processus de décentralisation des fonctions gouvernementales a été engagé dans un grand nombre de pays en développement. Cette thèse, s'articulant autour de quatre parties, aborde différents aspects de la décentralisation dans les pays en développement. La partie 1, consistant en une revue de la littérature, s'attache à analyser les effets théoriques attendus de la décentralisation, à examiner leur pertinence dans le cadre particulier des pays en développement et à dresser un bilan critique des études économétriques évaluant l'existence de tels effets (chapitre 1). La partie 2 s'intéresse à la pertinence d'un argument essentiel en faveur de la décentralisation, largement ignoré dans les études portant sur les pays en développement : le principe de compétition. Il s'agit alors d'analyser l'existence d'interactions stratégiques entre les gouvernements locaux dans un contexte de ressources budgétaires faibles (cas du Bénin, chapitre 2) et d'absence de démocratie locale (cas de la Chine, chapitre 3). La partie 3 porte sur les relations verticales entre le gouvernement central et les gouvernements locaux. Plus précisément, elle se focalise sur l'effet des transferts du centre sur les recettes budgétaires propres des communes au Bénin (chapitre 4) et sur les déterminants de l'allocation des transferts entre les juridictions locales du Sénégal (chapitre 5). Enfin, la partie 4 est consacrée à déterminer l'impact moyen et distributionnel de la décentralisation sur l'accès des populations locales aux services de base (chapitre 6)

Yardstick competition in a Federation: Theory and Evidence from China

While some scholars argue that fiscal decentralization gave Chinese local officials strong incentives to promote local economic growth, traditional fiscal federalism theories are not directly relevant to explain such an effect in the particular context of China. In this paper, we explain the existence of interjurisdictional competition among Chinese local officials using a model of yardstick competition "from the top", in which the central government (and not local voters) creates a competition among local officials by rewarding or punishing them on the basis of relative economic performance. Our model predicts that, in this context, local governments are forced to care about what other incumbents are doing and that public spending settings are strategic complements. Then, by estimating a spatial lag dynamic model for a panel data of 29 Chinese provinces from 1980 to 2004, we provide empirical evidence of the existence of such public spending interactions. We propose a rigorous empirical framework which takes into account heterogeneity, simultaneity and endogeneity problems and spatial error dependence. The results are encouraging to the view that there are some strategic interactions among Chinese provinces, resulting from a yardstick competition created by the central government

Does Decentralization Facilitate Access to Poverty-Related Services? Evidence from Benin

We study the effect of decentralization on the access to some poverty-related public services in Benin. Compiling panel data from local governments' accounts and from surveys on 18,000 Beninese households performed in 2006 and 2007, our study suggests that decentralization has a positive overall effect on access to basic services. However, this effect appears to be nonmonotone following an inverted U-shaped curve. It varies according to local jurisdictions' wealth and to the nature of basic services. Decentralization in Benin contributes positively to the reduction of poverty by improving the average access to poverty-related services. However, the devil is in the details, as decentralization seems to increase inequality among local governments in terms of access. Another result relying on the success of decentralization in Benin is the prioritization of basic services, which differs among local governments according to their wealth. While the poorest jurisdictions neglect primary education, focusing more on access to drinking water, the richest ones get less attention to sewage services, since these are already provided at a sufficiently high level

Decentralization in Africa and the nature of local governments' competition: evidence from Benin

Without denying particular dimensions of the decentralisation in Sub-Saharan countries, this paper applies standard reasoning from the fiscal federalism literature to a developing country and tests the existence of strategic interactions among local Beninese governments, called 'communes'. We first propose a two-jurisdiction model of public expenditure interactions, considering a constrained Nash equilibrium to capture the extreme poverty of some communes. We show that spillovers among jurisdictions involve strategic behaviours of local officials who have sufficient levels of fiscal resources. Second, by estimating a spatial lag model, our analysis provides evidence for the presence of strategic interactions in Benin, contingent on 'communes fiscal autonomy. Such interactions arise among communes which are geographically or ethnically close. We also highlight both an opportunistic behaviour of local governments before local elections and an effect of partisan affiliations. This African democracy appears to be as concerned as developed democracies with strategic fiscal interactions