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Decentralisation and Poverty Reduction: A Conceptual Framework for the Economic Impact

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  • Steiner, Susan

Abstract

This paper contributes to providing insights into the impact of decentralisation on poverty. It starts out with an overview of which role decentralisation plays in strategies and policies for poverty eradication and derives economic and political impact channels. It concentrates on the economic channel, the reasoning of which is rooted in fiscal federalism theory. It shows that decentralisation cannot only influence poverty by assigning expenditure responsibility to lower levels of government but also by assigning tax-raising power, which has so far been neglected by the literature. The paper concludes by pointing out a number of possible risks for realising the poverty-reducing potential of decentralisation.

Suggested Citation

  • Steiner, Susan, 2005. "Decentralisation and Poverty Reduction: A Conceptual Framework for the Economic Impact," GIGA Working Papers 3, GIGA German Institute of Global and Area Studies.
    • Handle: RePEc:zbw:gigawp:3
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    Cited by:

    1. Dombrowsky, Ines & Lkhagvadorj, Ariunaa & Schoderer, Mirja, 2018. "River basin management and fiscal decentralisation: mutually supportive or counterproductive? A case study of Mongolia," IDOS Discussion Papers 10/2018, German Institute of Development and Sustainability (IDOS).
    2. Regina Birner & Sarfraz Khan Qureshi & Kamiljon Akramov & Bilal Hassan Khan, 2006. "Voice and Votes—Does Political Decentralisation Work for the Poor and for Women? Empirical Evidence from the 2005 Local Government Elections in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(4), pages 1345-1360.
    3. Tristan Canare, 2022. "Decentralization and welfare: Evidence from a panel of countries," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(3), pages 767-796, September.
    4. Canares, Michael P., 2010. "The Excluded Poor: How Targeting Has Left out the Poor in Peripheral Cities in the Philippines," WIDER Working Paper Series 061, World Institute for Development Economic Research (UNU-WIDER).
    5. Muhammad Shahid & Khalil Ahmad & Rukhsana Kalim, 2022. "Different dimensions of decentralization and rural–urban poverty in Pakistan," Poverty & Public Policy, John Wiley & Sons, vol. 14(2), pages 166-183, June.
    6. Sehrish Shahzad & Bushra Yasmin, 2016. "Does Fiscal Decentralisation Matter for Poverty and Income Inequality in Pakistan?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 55(4), pages 781-802.

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    More about this item

    Keywords

    Local public goods; local revenue; poverty;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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