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Federalism and Inclusion in Developing Economies

Raul Fabella and Sarah Lynne Daway-Ducanes ()
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Raul Fabella: School of Economics, University of the Philippines Diliman

No 201804, UP School of Economics Discussion Papers from University of the Philippines School of Economics

Abstract: Using two-step system-GMM on a panel data of 105 economies over the period 1987-2016, we present formal statistical evidence that Federalism is a strong predictor of greater income inequality in developing economies. It is also a strong predictor of higher poverty incidence and poverty severity on average for all countries. Federalism does not predict lower poverty incidence and severity in developing countries. Thus for a developing economy such as the Philippines, Federalism appears to be a leap from the frying pan into the fire of even greater income inequality and poverty incidence.

Keywords: federalism; poverty; inequality (search for similar items in EconPapers)
JEL-codes: D3 I3 O1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-sea
Date: 2018-09
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Published as UPSE Discussion Paper No. 2018-04, September 2018

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Persistent link: https://EconPapers.repec.org/RePEc:phs:dpaper:201804

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