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Political Decentralization

Author

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  • Dilip Mookherjee

    (Department of Economics, Boston University, Boston, Massachusetts 02215)

Abstract

I provide a critical overview of the literature on political decentralization. After reviewing first- and second-generation theories of federalism, I describe recent empirical studies focusing mainly on determinants of capture and local government accountability emphasized by second-generation theories. The article concludes by describing emerging new issues that deserve more attention in future research: a wider range of political distortions beyond capture and corruption; effects of decentralization on intercommunity allocations, learning, and experimentation, and on democracy itself; a comparison of decentralization with other organizational alternatives; and issues pertaining to design and implementation raised by first-generation federalism theories, such as interjurisdictional spillovers, vertical fiscal relations, the range of devolution, and the political economy of implementation.

Suggested Citation

  • Dilip Mookherjee, 2015. "Political Decentralization," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 231-249, August.
    • Handle: RePEc:anr:reveco:v:7:y:2015:p:231-249
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-economics-080614-115527
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    More about this item

    Keywords

    accountability; capture; corruption; democracy; devolution; federalism;
    All these keywords.

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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