Fiscal decentralization for poverty reduction in Asia: opportunities, challenges and policy issues

Muhammad Hussain Malik
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Muhammad Hussain Malik: Economic Affairs Officer, Economic and Social Commission for Asia and the Pacific, Bangkok

Asia-Pacific Development Journal, 2008, vol. 15, issue 2, 13-33

Abstract: The increasing popularity of decentralization has been due to political imperatives and the economic rationale of improving the efficiency of the allocation of resources and the responsiveness of policymaking to local needs and preferences. There are various forms of decentralization, but this paper is focused mainly on fiscal decentralization. The paper analyses the challenges and policy issues of decentralization with respect to experiences of countries in Asia. It examines the benefits and advantages of decentralization, as well as the various costs. The financial and human resources costs can be quite large, especially in the early phases of decentralization. It is essential to conduct a careful cost-benefit evaluation before making a decision on the process of fiscal decentralization. The paper concludes with some suggestions for measures and policy options that could maximize the benefits and minimize the risks of the fiscal decentralization process and make it conducive to poverty reduction.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:unt:jnapdj:v:15:y:2008:i:2:p:13-33

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