Fiscal Decentralisation and Poverty in South Africa: Evidence from Panel Data Analysis

Tebogo Moche (), Nara Monkam and Goodness Aye ()
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Tebogo Moche: Department of Economics, University of Pretoria
Goodness Aye: Department of Economics, University of Pretoria

No 201378, Working Papers from University of Pretoria, Department of Economics

Abstract: This paper examines the dynamic relationship between fiscal decentralisation and poverty in South Africa within a panel data framework. The data used covers the period 2005 to 2011 for the eight metropolitan municipalities making a total of 56 observations. We use household consumption expenditure per capita as a proxy for poverty and the ratio of metropolitan expenditure to national government expenditure as fiscal decentralisation. The results from a panel VAR estimated with GMM, show a negative short run effect of fiscal decentralisation on household consumption per capita in South Africa. These results have important policy implications.

Keywords: Fiscal decentralisation; municipalities; poverty; consumption expenditure; panel data (search for similar items in EconPapers)
JEL-codes: C33 H31 H72 H77 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2013-12
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pre:wpaper:201378

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