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The Impact of Devolution on Government Size and Provision of Social Services: Evi¬dence from Pakistan

Qurat ul Ain (), Tahir Yousaf (), Yan Jie () and Yasmeen Akhtar ()
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Qurat ul Ain: School of Public Finance and Taxation, South Western University of Finance and Economics
Tahir Yousaf: Business School, Sichuan University
Yan Jie: School of Public Finance and Taxation, South Western University of Finance and Economics
Yasmeen Akhtar: Noon of Business School, University of Sargodha

Hacienda Pública Española / Review of Public Economics, 2020, vol. 234, issue 3, 105-135

Abstract: This paper provides empirical evidence on the association between post-2001 devolution reform policy, government size, and specific components of government expenditures based on a sample of panel data of provincial units in Pakistan from 1990 to 2015. The results demonstrate that devolution is associated with a larger government size, which provides empirical support for the common-pool hypothesis, implying that the decentralization that matters for the size of the general government depends on how sub-na¬tional governments finance their expenditures. Moreover, the findings suggest a significant increase in the magnitude of Health and education facilities at the local level following the devolution reforms.

Keywords: Devolution reforms; size of government; Social service delivery; common-pool hypothesis; Leviathan hypothesis. (search for similar items in EconPapers)
JEL-codes: H50 I10 I20 I30 (search for similar items in EconPapers)
Date: 2020
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Handle: RePEc:hpe:journl:y:2020:v:234:i:3:p:105-135