Decentralization in Developing Economies

Lucie Gadenne and Monica Singhal

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Abstract: Standard models of fiscal federalism suggest many benefits of decentralization in developing economies, and there has been a recent push toward decentralization around the world. However, developing countries presently still have less decentralization, particularly on the revenue side, than both developed countries today and the United States and Europe historically. We consider how the trade-offs associated with fiscal federalism apply in developing countries and discuss reasons for their relatively low levels of decentralization. We also consider additional features relevant to federalism in developing economies, such as the prevalence of nongovernmental organizations and the role of social incentives in policy design.

Keywords: fiscal federalism; public goods; taxation; transfers; corruption (search for similar items in EconPapers)
Date: 2014-08
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Published in Annual Review of Economics, 2014, 6, pp.581-604. ⟨10.1146/annurev-economics-080213-040833⟩

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Journal Article: Decentralization in Developing Economies (2014)
Working Paper: Decentralization in Developing Economies (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01510263

DOI: 10.1146/annurev-economics-080213-040833

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