IDEAS home Printed from https://ideas.repec.org/p/npf/wpaper/18-240.html
   My bibliography  Save this paper

Impact of Intergovernmental Fiscal Transfers on Gender Equality in India: An Empirical Analysis

Author

Listed:
  • Stotsky, Janet G.

    (American University)

  • Chakraborty, Lekha

    (National Institute of Public Finance and Policy)

  • Gandhi, Piyush

    (Oxford University)

Abstract

Intergovernmental fiscal transfers (IGFT) are, in theory, neither good nor bad for tackling gender inequalities. Fiscal federalism with asymmetry in revenue and expenditure assignments inevitably leads to vertical and horizontal imbalances in public service provisioning. Intergovernmental transfers can play a role in equalization of fis-cal capacities because the states of India have different tax raising capacities and ca-pacities for funding public expenditure. Do higher per capita fiscal transfers help in reducing gender inequalities across states in India? Using data from the Finance Accounts of various states, we analyse the impact of fiscal transfers - both conditional and unconditional fiscal transfers - on the gender parity index in education, using panel data models. We find that unconditional transfers have a significant and positive impact on gender parity outcomes in the education sector at the primary and secondary levels, in contrast to tied transfers. The models also control for gender budgeting initiatives across states and find that gender budgeting has a beneficial effect on education equality. The policy implication of these results for the recently constituted Fifteenth Finance Commission in India is to strengthen the gender equality criteria in intergovernmental transfers in India.

Suggested Citation

  • Stotsky, Janet G. & Chakraborty, Lekha & Gandhi, Piyush, 2018. "Impact of Intergovernmental Fiscal Transfers on Gender Equality in India: An Empirical Analysis," Working Papers 18/240, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:18/240
    Note: Working Paper 240, 2018
    as

    Download full text from publisher

    File URL: https://www.nipfp.org.in/media/medialibrary/2018/10/WP_2018_240_uL4mCMH.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. M. Govinda Rao & Nirvikar Singh, 2007. "The Political Economy of India's Fiscal Federal System and its Reform," Publius: The Journal of Federalism, CSF Associates Inc., vol. 37(1), pages 26-44, Winter.
    2. Tony Addison & Miguel Niño‐Zarazúa & Finn Tarp, 2015. "Aid, Social Policy and Development," Journal of International Development, John Wiley & Sons, Ltd., vol. 27(8), pages 1351-1365, November.
    3. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Reserving Market Incentives," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 83-92, Fall.
    4. Michael Smart, 1996. "Taxation incentives and deadweight loss in a system of intergovernmental transfers," Working Papers msmart-96-03, University of Toronto, Department of Economics.
    5. Ms. Janet Gale Stotsky, 2006. "Gender Budgeting," IMF Working Papers 2006/232, International Monetary Fund.
    6. Lekha S. Chakraborty, 2010. "Determining Gender Equity in Fiscal Federalism-- Analytical Issues and Empirical Evidence from India," Economics Working Paper Archive wp_590, Levy Economics Institute.
    7. de Mello, Luiz Jr, 2000. "Fiscal Decentralization and Intergovernmental Fiscal Relations: A Cross-Country Analysis," World Development, Elsevier, vol. 28(2), pages 365-380, February.
    8. Rudrani Bhattacharya & Parma Chakravartti & Sudipto Mundle, 2019. "Forecasting India’s economic growth: a time-varying parameter regression approach," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 12(3), pages 205-228, September.
    9. Richard A. Musgrave, 1997. "Devolution, Grants, and Fiscal Competition," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 65-72, Fall.
    10. Wallace E. Oates & Wallace E. Oates, 2004. "An Essay on Fiscal Federalism," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 22, pages 384-414, Edward Elgar Publishing.
    11. Robin Boadway & Anwar Shah, 2007. "Intergovernmental Fiscal Transfers : Principles and Practice," World Bank Publications - Books, The World Bank Group, number 7171.
    12. Abhishek Anand & Lekha S. Chakraborty, 2016. "'Engendering' Intergovernmental Transfers: Is There a Case for Gender-sensitive Horizontal Fiscal Equalization?," Economics Working Paper Archive wp_874, Levy Economics Institute.
    13. Ms. Janet Gale Stotsky & Mr. Asad Zaman, 2016. "The Influence of Gender Budgeting in Indian States on Gender Inequality and Fiscal Spending," IMF Working Papers 2016/227, International Monetary Fund.
    14. M. Govinda Rao, 2018. "Public finance in India: some reflections," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 45(2), pages 113-127, June.
    15. Stephan Litschig & Kevin M. Morrison, 2013. "The Impact of Intergovernmental Transfers on Education Outcomes and Poverty Reduction," American Economic Journal: Applied Economics, American Economic Association, vol. 5(4), pages 206-240, October.
    16. Roy, Shubho & Shah, Ajay & Srikrishna, B.N. & Sundaresan, Somasekhar, 2018. "Building State capacity for regulation in India," Working Papers 18/237, National Institute of Public Finance and Policy.
    17. Bird, Richard M. & Smart, Michael, 2002. "Intergovernmental Fiscal Transfers: International Lessons for Developing Countries," World Development, Elsevier, vol. 30(6), pages 899-912, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chakraborty, Lekha, 2021. "Fiscal Federalism, Expenditure Assignments and Gender Equality," Working Papers 21/334, National Institute of Public Finance and Policy.
    2. Chakraborty, Lekha S, 2021. "Fiscal Federalism, Expenditure Assignments and Gender Equality," MPRA Paper 111949, University Library of Munich, Germany.
    3. Chakraborty, Lekha & Nayyar, Veena & Jain, Komal, 2019. "The Political Economy of Gender Budgeting: Empirical Evidence from India," Working Papers 19/256, National Institute of Public Finance and Policy.
    4. Krishnan, Supriya & Patnaik, Ila, 2018. "Health and Disaster Risk Management in India," Working Papers 18/241, National Institute of Public Finance and Policy.
    5. Sidra Naeem & Rana Ejaz Ali Khan, 2021. "Fiscal Decentralization and Gender Equality in Developing Economies: Dynamics of Income Groups in Economies and Corruption," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(9), pages 745-761, September.
    6. Bailey, Rishab & Parsheera, Smriti, 2018. "Data localisation in India: Questioning the means and ends," Working Papers 18/242, National Institute of Public Finance and Policy.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Muhammad Sabir, 2010. "Financial Implications of the 7th NFC Award and the Impact on Social Services," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 49(4), pages 387-403.
    2. Khalida Ghaus & Muhammad Sabir, 2014. "Intergovernmental Fiscal Transfers and Gender Sensitive Education Financing," Southern Voice Occasional Paper 13, Southern Voice.
    3. Manuel E. Lago & Santiago Lago-Peñas & Jorge Martinez-Vazquez, 2024. "On the effects of intergovernmental grants: a survey," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(3), pages 856-908, June.
    4. Seppo Honkapohja & Frank Westermann, 2009. "Rethinking Subsidiarity in the EU: Economic Principles," Palgrave Macmillan Books, in: Seppo Honkapohja & Frank Westermann (ed.), Designing the European Model, chapter 10, pages 331-365, Palgrave Macmillan.
    5. Smith, Heidi Jane M. & Revell, Keith D., 2016. "Micro-Incentives and Municipal Behavior: Political Decentralization and Fiscal Federalism in Argentina and Mexico," World Development, Elsevier, vol. 77(C), pages 231-248.
    6. Tanja A. Boerzel & Madeleine O. Hosli, 2002. "Comparative Federalism meets the European Union," The Constitutionalism Web-Papers p0007, University of Hamburg, Faculty for Economics and Social Sciences, Department of Social Sciences, Institute of Political Science.
    7. Prakash Chandra Jha, 2015. "Theory of fiscal federalism: an analysis," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 17(2), pages 241-259, October.
    8. Prakash Chandra, Jha, 2012. "Theory of Fiscal Federalism: An Analysis," MPRA Paper 41769, University Library of Munich, Germany, revised 06 Oct 2012.
    9. Chakraborty, Lekha, 2024. "Gender Budgeting: Public Financial Management Tool for Accountability," Working Papers 24/409, National Institute of Public Finance and Policy.
    10. Manuel E. Lago & Santiago Lago-Peñas & Jorge Martinez-Vazquez, 2022. "On the effects of intergovernmental grants: a survey," Working Papers. Collection A: Public economics, governance and decentralization 2204, Universidade de Vigo, GEN - Governance and Economics research Network.
    11. Muhammad Sabir, 2001. "Dynamic Consequences of the 1997 NFC Award: Provincial Social Sector Expenditures," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 40(4), pages 967-984.
    12. Sorens, Jason, 2016. "Vertical Fiscal Gaps and Economic Performance: A Theoretical Review and an Empirical Meta-analysis," Working Papers 06856, George Mason University, Mercatus Center.
    13. Irina N. Ilina & Carol S. Leonard & Evgenij E. Plisetskij, 2014. "Russian Regional Resilience: Finance, Cooperation And Resource Abundance (A Case Study Of Khanty-Mansiysk)," HSE Working papers WP BRP 15/PA/2014, National Research University Higher School of Economics.
    14. Ines Helm & Jan Stuhler, 2024. "The Dynamic Response of Municipal Budgets to Revenue Shocks," American Economic Journal: Applied Economics, American Economic Association, vol. 16(4), pages 484-527, October.
    15. Martinez-Vazquez, Jorge & McNab, Robert M., 2003. "Fiscal Decentralization and Economic Growth," World Development, Elsevier, vol. 31(9), pages 1597-1616, September.
    16. Song, Yang, 2013. "Rising Chinese regional income inequality: The role of fiscal decentralization," China Economic Review, Elsevier, vol. 27(C), pages 294-309.
    17. André Schultz & Alexander Libman, 2015. "Is there a local knowledge advantage in federations? Evidence from a natural experiment," Public Choice, Springer, vol. 162(1), pages 25-42, January.
    18. Anisah Alfada, 2019. "Does Fiscal Decentralization Encourage Corruption in Local Governments? Evidence from Indonesia," JRFM, MDPI, vol. 12(3), pages 1-14, July.
    19. Trillas, Francesc, 2010. "Electricity and telecoms reforms in the EU: Insights from the economics of federalism," Utilities Policy, Elsevier, vol. 18(2), pages 66-76, June.
    20. M.S. Tumanggor, 2020. "Issuance of Municipal Bonds through Capital Markets as Financial Revenue for Regional Development," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 326-334.

    More about this item

    Keywords

    intergovernmental fiscal transfers (IGFT) ; gender equality ; fiscal federalism ; gender budgeting ; panel data;
    All these keywords.

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:npf:wpaper:18/240. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: S.Siva Chidambaram (email available below). General contact details of provider: http://www.nipfp.org.in .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.