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Fiscal Decentralisation and Poverty in South Africa: Evidence from Panel Data Analysis

Author

Listed:
  • Tebogo J. Moche

    (Department of Economics, University of Pretoria)

  • Nara Monkam

    (Department of Economics, University of Pretoria)

  • Goodness C. Aye

    (Department of Economics, University of Pretoria)

Abstract

This paper examines the dynamic relationship between fiscal decentralisation and poverty in South Africa within a panel data framework. The data used covers the period 2005 to 2011 for the eight metropolitan municipalities making a total of 56 observations. We use household consumption expenditure per capita as a proxy for poverty and the ratio of metropolitan expenditure to national government expenditure as fiscal decentralisation. The results from a panel VAR estimated with GMM, show a negative short run effect of fiscal decentralisation on household consumption per capita in South Africa. These results have important policy implications.

Suggested Citation

  • Tebogo J. Moche & Nara Monkam & Goodness C. Aye, 2013. "Fiscal Decentralisation and Poverty in South Africa: Evidence from Panel Data Analysis," Working Papers 201378, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:201378
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    Cited by:

    1. Megbowon Ebenezer & Aderoju Samuel & Gbenga Peter Sanusi, 2021. "Effectiveness of fiscal federalism for poverty reduction in Nigeria: an analysis of federal and state governments’ expenditures," SN Business & Economics, Springer, vol. 1(9), pages 1-19, September.

    More about this item

    Keywords

    Fiscal decentralisation; municipalities; poverty; consumption expenditure; panel data;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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