Power to the People? The Impact of Decentralization on Governance

Axel Dreher

No 06-121, KOF Working papers from KOF Swiss Economic Institute, ETH Zurich

Abstract: The paper analyzes the impact of decentralization on governance employing four indicators of governance and five measures of decentralization. Depending on data availability, crosssections for a maximum of 129 countries are estimated. Results for a panel of about 70 countries over the period 1984-2001 are also presented. The results show that decentralization - measured as the share of sub-national employment, revenues or, respectively, expenditures - improves governance. This is particularly true for low income countries but - depending on the indicator employed - to some extent for high income countries also. However, the number of sub-national government tiers exerts a negative impact on some dimensions of governance.

Keywords: Decentralization; Governance; Legal Quality; Judicial Independence; Federalism; Institutions (search for similar items in EconPapers)
Pages: 32 pages
Date: 2006-01
New Economics Papers: this item is included in nep-pbe and nep-pol
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:kof:wpskof:06-121

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