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A Dynamic Equalisation Model for Economic and Social Capital Grants with a South African Example

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  • Jaya Josie
  • Garry MacDonald
  • Jeffrey Petchey

Abstract

A capital grant model has been developed which can be used in developing economies to allocate grants to sub-national governments for economic or social capital. The model allows these allocations to happen in a way that increases the value of the capital stock whilst at the same time addresses any inter regional inequities, or economic inefficiencies. The model is also applied to South Africa as an illustrative example and the results of three model simulations for that country are presented. There is a discussion of the data requirements for the model and how it might be replicated by researchers for other economies.

Suggested Citation

  • Jaya Josie & Garry MacDonald & Jeffrey Petchey, 2008. "A Dynamic Equalisation Model for Economic and Social Capital Grants with a South African Example," Journal of Development Studies, Taylor & Francis Journals, vol. 44(8), pages 1169-1189.
    • Handle: RePEc:taf:jdevst:v:44:y:2008:i:8:p:1169-1189
    DOI: 10.1080/00220380802242420
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    References listed on IDEAS

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    1. Holtz-Eakin, Douglas, 1993. "State-specific estimates of state and local government capital," Regional Science and Urban Economics, Elsevier, vol. 23(2), pages 185-209, April.
    2. Myers, Gordon M., 1990. "Optimality, free mobility, and the regional authority in a federation," Journal of Public Economics, Elsevier, vol. 43(1), pages 107-121, October.
    3. Robin W. Boadway & Frank R. Flatters, 1982. "Efficiency and Equalization Payments in a Federal System of Government: A Synthesis and Extension of Recent Results," Canadian Journal of Economics, Canadian Economics Association, vol. 15(4), pages 613-633, November.
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    Cited by:

    1. Roy Bahl & Richard M. Bird, 2014. "Decentralization and Infrastructure: Principles and Practice," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1408, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Leonzio Rizzo & Riccardo Secomandi, 2018. "Lo stock di capitale comunale: indicazioni per le politiche di intervento infrastrutturale di Regione Lombardia," Working Papers 2018117, University of Ferrara, Department of Economics.
    3. Jorge Martinez-Vazquez & Andrey Timofeev, 2014. "Capital Infrastructure and Equity Objectives in Decentralized Systems," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1410, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

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