 Decentralization, Fiscal Independence, and Poverty in the PhilippinesTristan Canare and Jamil Paolo Francisco Public Budgeting & Finance, 2019, vol. 39, issue 4, 94-117 Abstract: Decentralization is a common public sector reform in developing countries. Its basic rationale is that local governments have an informational advantage regarding the needs and preferences of consumers. However, decentralization also has drawbacks. Foremost is the efficiency advantage of the central government in providing public services because of economies of scale and better access to resources. This study looked at the relationship between decentralization and poverty using data from Philippine cities and municipalities. Results suggest that decentralization, as represented by fiscal independence and measured by the share of locally sourced revenues to total local government revenues, is indeed associated with lower poverty. However, this effect is not linear—the marginal effect of decentralization on poverty diminishes as decentralization increases. Moreover, decentralization moderates the positive effect of good governance on poverty reduction and the magnitude of the relationship between poverty and decentralization is stronger in poorer municipalities than in richer ones. Date: 2019 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:pbudge:v:39:y:2019:i:4:p:94-117 Ordering information: This journal article can be ordered from Access Statistics for this article Public Budgeting & Finance is currently edited by Philip Joyce and William Simonsen More articles in Public Budgeting & Finance from Wiley Blackwell |
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