Decentralization Without DemocracyWorking Paper (2017)
Decentralization has been predominantly studied in democracies. We present a theory of decentralization's effects on public goods provision under autocracy yielding novel predictions. Decentralization improves productive services that directly raise citizen's incomes (which are taxed), but not social services that increase incomes less but contribute to other dimensions of well-being. The center incentivizes local policymakers by sharing tax revenue. However, social services do not deteriorate; productive services improvements are instead financed with efficiency improvements from having more knowledgeable policymakers making decisions. We test the model in Ethiopia, exploiting a natural experiment in which government implemented fiscal and administrative decentralization in part of the country. We sample households along borders separating decentralized and non-decentralized regions and employ a regression discontinuity design to identify causal impacts on service delivery. We find substantial empirical support for the model. The selective nature of service improvements highlights how electoral competition moderates the impacts of decentralization.
Publication DateSummer August 22, 2017
Citation InformationKatrina Kosec and Tewodaj Mogues. "Decentralization Without Democracy" Working Paper (2017)
Available at: http://works.bepress.com/katrina_kosec/25/