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1999, Policy Research Working Papers
AI
This research investigates the distributional outcomes of decentralized welfare programs, focusing on local targeting mechanisms. While decentralized programs potentially benefit from better local knowledge, they may also suffer from issues of local elite capture, especially in heterogeneous communities. The paper emphasizes the need for systematic evidence on targeting performance and highlights the trade-offs between efficiency and accountability in the design of community-based welfare initiatives.
It is now common for central governments to delegate authority over the targeting of antipoverty programs to better informedbut potentially less accountablecommunity organizations, while the center retains control over how much goes to each locality. We model the inter-connected behavior of the various actors in such a setting. The model's information structure provides scope for econometric identification. Results for Bangladeshs Food-for-Education Program indicate that withinvillage targeting improved with program size, and with lower land inequality, less remoteness, fewer shocks, and less private redistribution. Power in community decision making clearly mattered to the outcomes. However, there is little sign that the centers program placement took account of village attributes conducive to reaching the poor. Key words: Targeting, decentralization, poverty, inequality, Bangladesh JEL codes: I38, H73 E-mail for correspondence: [email protected], [email protected] ...
2009
Even though several studies have assessed the degree of progressivity in targeting communities under the participatory Social Investment Fund (SIF) approach to the provision of local public goods, there is yet little evidence on how increasing decentralization affects the quality of this targeting. We identify the impact of increasing decentralization on community targeting using the unique situation of Zambia's SIFs where the degree of decentralization changed in time and space across districts over the 15 years of program implementation. We find that greater decentralization of SIFs' functions to districts that had been deemed to have the necessary level of managerial capacity led to more progressive targeting across wards, mildly so at the national level and strongly so within districts. We also observe how local electoral politics gained importance with greater decentralization, with more votes received by the candidate from the majority party in the district council attracting more projects to a ward, and more projects in a ward rewarded by more votes for the councilor from the incumbent party. Decentralization thus made concerns with community poverty more salient in targeting and local politics more important in public goods allocation.
2005
The standard theory of anti-poverty targeting assumes individual incomes cannot be observed, but statistical properties of income distribution in broadly defined groups are known. ‘Indicator targeting’ rules are then derived for the forms of transfers conditioned on group membership of individuals. In this literature the motivating notion of a “group” is purely statistical, even when it is groups such as localities and ethnicities. We focus instead on groups which are “communities”, meaning thereby collections of individuals who have access to communityspecific public goods, from which non-members are excluded. Such differential access constitutes a source of inequality among poor individuals belonging to different communities, which is not captured by monetary earnings. We show that this formulation of what constitutes a group changes many of the basic results of the indicator targeting literature. Optimal targeting for poverty alleviation leads to seemingly paradoxical rules, such...
Over the years considerable progress has been made in designing and implementing policies and in building appropriate structures of incentives and institutions to combat poverty. Yet, almost a billion people in the world continue to be in abject poverty. They can not afford minimum requirements of food, clothing, shelter, and education and health facilities. Majority of the poor in live in less developed countries of Sout h Asia, sub-Saharan Africa and Latin America. Therefore, nature and causes of poverty and interventions to improve the living conditions of poor continue to be a matter of concern and a priority area of research. While our understanding of this problem today is significantly better than what it was thirty years ago, there is no doubt that much more remains to be done to evolve effective policies and institutions and find more effective ways of implementing the to combat this multifaceted problem.
This paper examines allocation of local public goods over jurisdictions (villages) with individuals with identical tastes and different incomes, in a model with democratic institutions and majority rule. The median voter (in income) in each jurisdiction determines the probability of re-election for the incumbent government. The jurisdiction with the median of these median voters is most favoured. With identical median voters in jurisdictions, and with re-election requiring less than 50mandate, jurisdictions with higher income inequality get favoured. Results from a survey data (from NCAER) on infrastructure provision in 1669 Indian villages confirm this hypothesis. Ethnic fragmentation does not affect public good provision but political fragmentation does. Finally, villages with the median population are the most favoured for public goods allocation. Sparsely populated and too densely populated villages are relatively neglected.
2013
This paper examines empirically a policy question whether or not there is a significant effect of the character of the relationships between the third sector organizations and public administration units for distribution of public resources at the local community level ( gmina or communes ). The key issue concerns the role of NGOs in making the level of community deprivation – measured by multidimensional index of local deprivation (MILD) – a factor in allocating resources to gmina (in the form of various subsidies accrued to it). An evaluation of the relative importance of the two competing criteria, equity and efficiency – which are typically, at least implicitly, involved in distribution of public resources – is conducted using public statistics data from the Bank of Local Data for years 2008 and 2010. Since it is usually assumed that the former remains of focus of the third sector units while the latter seems to remain under responsibility of the administration, one may expect t...
Journal of Development Economics, 2006
A commonly alleged pitfall of decentralization is that poverty, socio-economic inequality and lack of political competition allow local elites to capture local governments.
2003
The paper studies the design of inter-governmental transfers when redistribution is e¤ected through the public provision of a private good (education) by local government agents. The central government does not necessarily have the same preferences as the local agents regarding the relative welfare of poor and non-poor individuals, but must rely on them to implement public spending decisions. This divergence of preferences induces an incentive role, which does not rely on the existence of externalities, for matching grants that take the form of two-part tar-i¤s. Numerical simulations are used to investigate the dependence of the matching grant on the relationship between central and local preferences, local poverty rates, and the use of poverty maps.
Journal of Public Economics, 2003
This paper takes a fresh look at the trade-off between centralized and decentralized provision of local public goods. It argues that the sharing of the costs of local public spending in a centralized system will create a conflict of interest between citizens in different jurisdictions. When spending decisions are made by a legislature of locally elected representatives, this conflict of interest will play out in the legislature. Depending on precisely how the legislature behaves, the result may be excessive public spending or allocations of public goods characterized by uncertainty and misallocation across districts. The extent of the conflict of interest between districts is affected by spillovers and differences in tastes for public spending. Thus, the relative performance of centralized and decentralized systems depends upon spillovers and differences in tastes for public spending, but for different reasons than suggested in the existing literature.
The Journal of Economic Inequality, 2005
The standard theory of anti-poverty targeting assumes individual incomes cannot be observed, but statistical properties of income distribution in broadly defined groups are known. 'Indicator targeting' rules are then derived for the forms of transfers conditioned on group membership of individuals. In this literature the motivating notion of a "group" is purely statistical, even when it is groups such as l ocalities and ethnicities. We focus instead on groups which are "communities", meaning thereby collections of individuals who have access to communityspecific public goods, from which non-members are excluded. Such differential access constitutes a source of inequality among poor individuals belonging to different communities, which is not captured by monetary earnings. We show that this formulation of what constitutes a group changes many of the basic results of the indicator targeting literature. Optimal targeting for poverty alleviation leads to seemingly paradoxical rules, such as targeting transfers to the community that is richer. Total wealth of non-poor members of a community and its distribution both become relevant for specifying optimal indicator targeting rules. In addition, a poverty measure that is sensitive to the community identities of poor individuals, yet defined on nominal incomes, may be incompatible with some of the basic axioms in the standard literature on poverty measurement.
Perspectives from Academics and Policy Makers, 2015
2018
This paper studies the provision of local public goods and the effect of the political system on its allocation. Recognizing that most public goods are de facto local, we propose a model of allocation of local public good under political competition. We derive predictions regarding the relationship between public good provision and population in localities that differ depending on the regime: majoritarian and proportional representation systems. Using the satellite nightlight data as a proxy for local public good provision, we show that the predicted patterns are observed. Our finding raises interesting questions regarding the measurement of inequality in public good allocation. EXTREMELY PRELIMINARY. PLEASE DO NOT POST OR DISTRIBUTE. JEL Classification Numbers:
Does Decentralization Enhance Service Delivery and Poverty Reduction?, 2009
World Development
Decentralization is thought to facilitate poverty reduction by giving power over resource distribution to officials with local knowledge about where resources are most needed. However, decentralization also implies less oversight and greater opportunities for local officials to divert resources for political or personal ends. We investigate this tradeoff by exploring the degree to which Kenya's premier decentralized development program-the Constituency Development Fund-targets the poor. Using a detailed spatial dataset of 32,000 CDF projects and data on the local distribution of poverty within Kenyan constituencies, we find that most MPs do not target the poor in their distribution of CDF projects. In places where they do, this tends to be in constituencies that are more rural, not too large, and, in keeping with the findings in Harris and Posner (2019), where the poor and non-poor are spatially segregated from one another. Our analyses suggest that the poor are underserved not just because politicians lack incentives to target them with development resources but because the poor are challenging to reach. In addition to these substantive findings, we also make a methodological contribution by underscoring how aggregation to the administrative unit may truncate important variation within geographic areas, and how a point-level analysis may avoid this pitfall.
It is now common for central governments to delegate authority over the targeting of anti- poverty programs to better informed—but potentially less accountable—community organizations, while the center retains control over how much goes to each locality. We model the inter-connected behavior of the various actors in such a setting. The model's information structure provides scope for econometric identification. Results for Bangladesh's Food-for-Education Program indicate that within- village targeting improved with program size, lower land inequality, less remoteness, fewer shocks, and less private redistribution. Power in community decision making clearly mattered to the outcomes. However, there is little sign that the center's program placement took account of village attributes conducive to reaching the poor.
2016
Raghbendra Jha3 This paper examines allocation of local public goods over jurisdictions (villages) with individuals with identical tastes and different incomes, in a model with demo-cratic institutions and majority rule. The median voter (in income) in each juris-diction determines the probability of re-election for the incumbent government. The jurisdiction with the median of these median voters is most favoured. With identi-cal median voters in jurisdictions, and with re-election requiring less than 50man-date, jurisdictions with higher income inequality get favoured. Results from a survey data (from NCAER) on infrastructure provision in 1669 Indian villages confirm this hypothesis. Ethnic fragmentation does not affect public good provision but politi-cal fragmentation does. Finally, villages with the median population are the most favoured for public goods allocation. Sparsely populated and too densely populated villages are relatively neglected. JEL classifications: H41;H72
For several decades now, the decentralization of policy authority to local officials has been a key component of development strategies around the world–emanating both from developing country governments themselves and the international development community as well. After more than thirty years of these efforts, we still have no clear consensus concerning the impact this strategy has had on the lives of the citizens of these countries. In the following pages, I explore through analysis of the case of Colombia how the local electoral context of municipalities helps us answer this question through its impact on budgetary choices with disparate development outcomes that, nonetheless, were carried out under the umbrella of a decentralized strategy of development.
In some countries the reform of public service provision has been accompanied by a parallel process of devolution. However, the application of …scal federalism has not always produced the desired e¤ects. We argue that this result may depend on two factors: a) a lack of coordination causing a non-optimal allocations of resources at aggregate level; b) a lack of incentive to coordination. In an environment with full information and no restriction on the quantities to be provided, …scal federalism is always suboptimal for the whole community, as one may expect. However, this is not necessarily means that each region is worse o¤. This implies that coordination is never the outcome of the strategic interaction between the actors. Our model uses a framework where goods to be provided are impure public goods, a framework that is more realistic to model the type of services provided at local level. This assumption allows us to consider also a scenario where the production and consumption of the local public good do not necessarily coincide. In this environment there are potentials for welfare improvements and a great scope for income redistribution, but coordination is even more problematic.
2010
Central governments are increasingly delegating to local governments the implementation of social programs in hopes of improving their performance. Yet, for decentralized program implementation to be effective, locally elected officials must have an incentive to achieve high levels of performance. This paper analyzes how electoral incentives affect the performance of a major decentralized conditional cash transfer program intended on reducing school dropout rates among children of poor households in Brazil. We show that while this federal program successfully reduced school dropout by 8 percentage points, the program's impact was 36 percent larger in municipalities governed by mayors who faced reelection possibilities compared to those with lame-duck mayors. First term mayors with good program performance were much more likely to get re-elected. These mayors adopted program implementation practices that were not only more transparent but also associated with better program outcomes. Overall, our findings underscore the importance of electoral incentives for the decentralization of public goods provision. JEL classification: D78, H43, I28, O15
2017
In recent years, many governments in developed and developing economies have implemented reforms to decentralize tax raising powers, the supply of public services, and other functions previously delivered by central governments, with the aim of achieving greater government accountability and more efficient and effective public services. In this thesis, I examine empirically the effects of fiscal decentralization on several key areas of public policy, including: poverty and income distribution (chapter 3), public healthcare and public education (chapter 4), and citizen trust in government (chapter 5). In order to examine the effects of fiscal decentralization I produce a fiscal decentralization dataset comprising of a range of indicators for tax and spending decentralization; subnational government autonomy; local government accountability and local government size (land area and population). Using this dataset, I produce the following findings. First, in chapter 3 tax and spending d...
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