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

Andrés Rodríguez-Pose and Roberto Ezcurra

No 2009-04, Working Papers from Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales

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.

Keywords: fiscal decentralization; political decentralization; regional disparities; territorial inequality; fiscal redistribution (search for similar items in EconPapers)
JEL-codes: H11 H71 R11 (search for similar items in EconPapers)
Date: 2009-05-14
New Economics Papers: this item is included in nep-geo and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42)

Published in Journal of Economic Geography 10(5), September 2010: 619-644

Downloads: (external link)
http://repec.imdea.org/pdf/imdea-wp2009-04.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to repec.imdea.org:80 (A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.)

Related works:
Journal Article: Does decentralization matter for regional disparities? A cross-country analysis (2010)
Working Paper: Does Decentralization Matter for Regional Disparities? A Cross-Country Analysis (2009)
Working Paper: Does decentralization matter for regional disparities? A cross-country analysis (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imd:wpaper:wp2009-04

Access Statistics for this paper

More papers in Working Papers from Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales Contact information at EDIRC.
Bibliographic data for series maintained by IMDEA RePEc Maintainer ( this e-mail address is bad, please contact ).