This dissertation examines the effect of fiscal decentralization on poverty reduction and explores potential transmission channels through pro-poor sectoral outcomes such as basic education, basic healthcare and agricultural productivity. We first develop a theoretical model to explain the interaction between decentralization and poverty reduction outcomes. In particular, we show that the marginal effect of fiscal decentralization on pro-poor sectors depends largely on the outcome of the trade-off between potential benefits derived from better matching of local preference due to local proximity, and the lack of technical capacity at the local level. This finding provides, in a way, a theoretical explanation of the different outcomes observed in fiscal decentralization programs around the world. This inconclusive theoretical result motivates an empirical analysis to assess whether there is any statistical significant relationship between fiscal decentralization and poverty. We implement this estimation using the Generalized Method of Moment Instrumental Variable (GMM-IV) methodology on 97 countries spanned over the period 1975-2000. Our estimation results reveal a statistically significant, but non-linear relationship between fiscal decentralization and poverty. In addition, we empirically explore potential transmission mechanism of the effect of fiscal decentralization on poverty through three sectors (basic education, basic healthcare and agricultural extension) that have been shown in the literature on basic needs and also by development practitioners to have significant bearing on the well-being of the poor. Finally, given the relatively high level of poverty in addition to the fact that most African countries are far behind in attaining their Millennium Development Goals (MDGs) targets, we investigate whether the effect of fiscal decentralization on poverty will be greater in Sub-Saharan Africa (SSA) relative to other regions.

We address the questions on what determines local government proliferation, specifically on the impact of intergovernmental transfers on proliferation. On exploring the determinants of proliferation, we provide a more elaborate empirical technique than exists in the literature by employing panel binary outcome, survival regression, as well as count analysis to capture the time varying effect from intergovernmental transfers. We also examine the impact of proliferation on service delivery outcomes and construct channels by which the policy may affect the outcomes in the education and health sectors. We apply panel difference-in-difference estimation and we uniquely identify the different treatment group and thus control for the plausible differential impact on outcomes in regards to changes in intergovernmental transfers. On the determinants of local government formation, there are likely competing effects across transfers on the decision to proliferate as well as on the extent of fragmentation given that we find (1) the lump-sum conditional grants positively influence the probability of proliferation, (2) a province with higher median share of equalization grants associates with higher number of local governments, (3) higher equalization grants implies a longer duration to the proliferation event, and (4) higher tax sharing in the proliferated local governments reflects higher stability where stability refers to the longer duration to the sequential proliferation event. The findings suggest the tactical central-local behavior may be present, however, the support of rent-seeking hypothesis on proliferation should not be generalized to overall system of transfers. On the impact from the proliferation policy, the education and health outcomes estimations provide mixed results within the treatment group. The findings shed light on the current practice of administrative or political decentralization, specifically on the competing local-central preferences within each sector on measured service delivery outcomes. The results from difference-in-difference (DID) estimations show support on attainment of education outcome in new local governments represented by a reduction in the dropout rate but not on the quality of education in terms of higher students’ tests scores even though there is a relatively higher conditional grants allocated to the proliferated local governments. Meanwhile, in terms of infant mortality rate, we only find evidence of improvement in infant mortality on the originating local government but not on the new local governments. Controlling for selectivity and production function covariates have not changed the pattern of the impact.

This dissertation comprises two essays. While the topics of both essays are different both are interrelated on the base of economic development. The first essay examines ethnic wage gaps on segmented labor markets with evidence from Latin American countries. The second essay revisits the determinants of fiscal decentralization with an emphasis on the role that geography plays in determining fiscal decentralization. The first essay contributes to limited literature on ethnic wage gaps in Latin America. It examines ethnic wage gaps for workers in formal and informal labor markets. Using data from Latin American countries we estimate and examine across-ethnic wage gaps for informal and formal markets, their changes over time, factors that explain their differences, and the wage gap distribution. More specifically, we verify that different ethnic wage gaps do exist across formal and informal markets; they behave differently not only at their means but also along the wage distribution. The results indicate that higher ethnic wage gaps in informal sectors exist not only on average but also throughout the distribution. In addition, we find that wage gaps have declined significantly over the last 10 years. we explain this by examining changes in the prices of institutional factors and changes in human capital endowments. The distributional analysis shows a decrease in the unexplained component, especially in the top part of the distribution. The second essay contributes to the existing literature on the determinants of fiscal decentralization by motivating theoretically and exploiting in depth the empirical relevance that geography has as a determinant of fiscal decentralization. The relationship between decentralization and geography is based on the logic that more geographically diverse countries show greater heterogeneity among their citizens, including their preferences and needs for public goods and services provisions. Communications and physical distance are also a very important issue and play a key role on the effect of geography over time. (Lora et. al., 2003) argue geography plays a key role in economic and social development, as well as in the institutional design of the countries; yet, this effect could be enhanced (or diminished) in the presence of better physical infrastructure or communications. The theoretical model in this paper builds on the work by Arzaghi and Henderson (2002) and Panizza (1999). For the empirical estimation, we use a panel data set for approximately 91 countries for the period 1960-2005. Physical geography is measured along several dimensions, including elevation, land area and climate. We construct a geographical fragmentation index and test its effect on fiscal decentralization. In addition, we interact the geographical fragmentation index with time-variant infrastructure variables in order to test the effect that infrastructure and communications have on the relationship between geography and fiscal decentralization. For robustness, we construct Gini coefficients for in-country elevation and climate. We find a positive and strong correlation between geographical factors and fiscal decentralization. We also find that while the development of infrastructure (in transportation, communications, etc.) tends to reduce the effect of geography on decentralization, this effect is rather small and mostly statistically insignificant, meaning that the impact of geography survives over time. The strategy has additional value because geography may be used as an instrument for decentralization in future econometric estimations where decentralization is used as an explanatory variable, but may be suspected to be endogenous to the economic process being studied (economic growth, political instability, macroeconomic stability, income distribution, etc.).

Given that all the governments in modern countries have put stress on service performance and quality, the role played by local governments is increasingly important. The main reason is that localization can provide a region with practical needs, so as to improve citizens¡¦ living quality. At the same time, with local decentralization, local governments can create respective regional distinctions and industrial cultures and learn from mutual competition. In the end, their citizen service performance will be further elevated reinforced. Currently, governments¡¦ functions have been expanding, which results in continuing increase in expenditures. Thus, financial decentralization has become a trend of modern countries, in which local governments have to have sufficient finance in order to effectively execute policies and plans. At present, our central government has ample financial resources and is in the position to distribute them, which helps the central government promote major policies and brings about local government¡¦s balanced development. However, in a different light, the decentralization of local finance is limited and resource distribution is out of balance. As a result, autonomous tasks have become difficult to be promoted, so the function of local autonomy cannot be well developed. Hence, the rule of thumb for wielding the substantive function of local governance is to elevate the autonomy of local finance. To increase local revenues, the central government passed the General Principles of Local Tax Act and Fee Act in 2002 to legalize the increase of local governments¡¦ revenues and give local governments more autonomy on their revenues. To this day, limited by pragmatic politics, the expected goal is hard to be attained in a short run, but, in order to effectively improve local financial plights, strengthen local chiefs¡¦ responsibility for the local finance they are in charge, maintain financial discipline and build the function of authorization management, the General Principles of Local Tax Act shall be fully followed in local governments¡¦ imposition of the special product tax, special tax and provisional tax, so as to improve local finance. The purposes of this study are to describe and analyze local governments¡¦ financial status, better understand the financial problems encountered by county/city governments and explore the goals to be attained for enhancing local finance, so as to put forth a strategy to reinforce financial autonomy. This study uses the research methodology including literature data collection, in-depth interviews and secondary data analysis, in which interviews with 11 financial experts were conducted. The main contents of this study cover the analysis of local financial structure in the dimension of law, comparison of county/city governments¡¦ financial revenue and expenditure, and analysis of Penghu County¡¦s financial revenue, expenditure and autonomy. The study further uncovers current local financial status and the existing problems, so as to put forth a strategy of financial autonomy to enhance local finance and attain the goal of sustainable management. By studying the overall dimension of local finance, this paper has concluded the following: 1. The expenditure structure is stiff, and the ratio of personnel expenses to annual expenses is too high. 2. Local financial autonomy shall be elevated and the subsidy system shall be enhanced. 3. Financial Distribution Act is required to be amended, but it will still not completely solve the financial problems. 4. Private participation in public construction or entrusted operation and development shall be strengthened. 5. Expenses of local non-statutory social welfare inflate and local governments¡¦ financial capacity is deficient. 6. Local governments¡¦ financial deficits have continued year by year, so public debts have also persistently increased. 7. Public property management shall be reinforced, so as to increase local financial revenues. 8. Even though General Principles of Local Tax Act are passed and enforced, their substantive function still cannot be wielded. Under existing statutory laws and regulations, the financial resources of local autonomy show severe shortages, and there are many problems existing amid respective local governments. In order to elevate local financial autonomy, this paper uses Penghu County as an example, and provides recommendations from the aspects of legal systems, policies and management respectively.

The desire is infinite, but the resources are limited. The relationship between fiscal decentralization and long-run economic growth is ambiguous. Several economists have made the case for fiscal decentralization as a means of promoting long-run economic growth based on the view that it leads to better resource allocation and a more productive, and possibly smaller, public sector. Countries have pursued decentralization policies both for political and developmental reasons. Fiscal decentralization, the allocation of tax and spending powers to lower levels of government, currently in vogue is based on notions of economic efficiency criteria. Although it is theoretically expected that decentralization leads to efficient provision of local public services and stimulates economic development, the theoretical underpinnings for this relationship remain largely undeveloped. The absence of an adequate theoretical framework has undermined the validity of the empirical work on this subject. Advocates of fiscal decentralization argue that among other benefits, it can increase the efficiency of delivery of government services. We use data from 23 counties (cities) of the Taiwan province. The empirical findings can be stated as follows. The primary finding is that the estimated coefficient on fiscal decentralization variable is positive and statistically significant . This finding provides evidence that fiscal decentralization contributes to economic growth. This paper is also one of the first to evaluate this claim empirically by looking at the association between expenditure decentralization and the efficiency of local government .We also provide evidence that expenditure (revenue) decentralization is a negative (positive) relation with the efficiency of local government. Further Tobit panel regression of 23 counties (cities) provide robust evidence that more decentralization is not associated with higher efficiency of local governments. Therefore that fiscal decentralization contributes to the efficiency of local governments is ambiguous in the previous period.

<p>This thesis analyzes the state of educational decentralization in Vietnam with the purpose to analyze how education has been decentralized in Vietnam; and if it has been in accordance with the purpose of the international development institution present in Vietnam.</p><p>The thesis presents a theoretical framework over public decentralization and educational decentralization. The theoretical framework builds the base for the case study and the final discussion. The case study is undertaken as interviews with four different Departments of Education and Training in four different provinces and three different development organizations included in the process of educational decentralization in Vietnam.</p><p>The results from the case study show that a decentralization of education has been undertaken in Vietnam. However, the decentralization has only been in the form of spatial decentralization, transferring responsibility and authority to lower levels of government, and has not decentralized decision-making authority to the Departments of Education and Training. The political sphere has not matched the decentralization of education with financial decentralization and has not increased the capacity within the Department of Education and Training. This lack of financial decentralization and capacity-building has provided a situation where the political sphere still keeps the decision-making authority over education. The development organizations on the other hand are pretty satisfied that decentralization of education has taken place in Vietnam. However, it has not met the purposes of the development organiza-tions.</p> / <p>Denna uppsats analyserar det aktuella tillståndet av utbildningsdecentralisering i Vietnam. Syftet är att analysera hur utbildning har blivit decentraliserat i Vietnam och hur denna decentralisering överrensstämmer med det uttalade syftet av de internationella utvecklingsinstitutionerna.</p><p>Uppsatsen presenterar en grundläggande teoretisk ram som behandlar offentlig administrativ decentralisering samt utbildningsdecentralisering. Denna teoretiska ram ligger till grund för uppsatsens fallstudie och dess avslutande diskussion.</p><p>Fallstudien i denna uppsats är gjord i intervjuform med fyra ”Department of Education and Training” samt tre internationella utvecklingsinstitutioner som medverkar i decentraliserings-processen av utbildning i Vietnam. Dessa intervjuer visar att utbildning har blivit decentraliserat i Vietnam. Dock har denna decentralisering endast flyttat beslutandemakt över utbildning till de lägre politiska nivåerna utan att ge ”Department of Education and Training” någon ökad frihet att ta individuella beslut. Den politiska sfären i Vietnam har på så sätt lyckats att decentralisera utbildning utan att ge ifrån sig politisk makt. Detta har skett genom att utbild-ningsdecentraliseringen inte har kombinerats med finansiell decentralisering samt att ”Department of Education and Training” inte har kontroll över sin egen kompetensutveckling.</p><p>Detta har lett till att en officiell decentralisering har ägt rum av utbildning i Vietnam. Dock har denna decentralisering inte främjat syftet uttalat av decentraliseringsteorin eller de interna-tionella utvecklingsinstitutionerna.</p>

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M. Tech. Public Management Tshwane University of Technology 2008. / This research departed from the hypothesis that inadequacies in terms of finances, human resources and infrastructure are what impedes the smooth implementation of the decentrilisation process in Rwanda. This study attempts to identify how the process of decentralisation in Nyarugenge District took place, and what kind of impact different resources and infrastructure had on the process of decentralisation. The study reveals that Rwanda has long suffered impediments to its decentralisation process. Recommendations include improving the financial, human resources and infrastructure aspects.

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In 1998, the government of British Columbia introduced a new form of tenure for community forestry. The Community Forest Agreement (CFA) was envisioned as a unique institutional mechanism for devolution, providing resource-dependent communities and First Nations in B.C. with the authority to set the direction of forest management in their locale, and to create local benefits. Relative to the industrial status quo, there were high expectations of community forestry and what it might achieve. This study empirically tested some of these expectations with respect to B.C.’s Community Forest Program. Taking a realist approach to evaluation, a variety of qualitative research methods were used to critically assess the structure, performance, and outcomes of the CFA. Analysis of the CFA revealed that its structure is virtually identical to tenures designed for industrial forestry with a few minor exceptions. In the current tenure regime, the CFA devolves limited power over strategic decisions and community control largely resides at the operational level, affecting on-the-ground aspects of timber harvesting rather than enabling a broader and more holistic approach to forest management. Outcomes of the CFA generally did not satisfy expectations that communities would commercially harvest botanical non-timber forest products, develop capacity for value-added wood processing, and utilize more environmentally-sensitive harvesting treatments. The study did find that CFAs supported local employment and were more labour intensive than industrial licensees in harvesting and silvicultural activities. Assessing the CFA structure and the on-the-ground outcomes side-by-side, this study suggests that the impediments to realizing a more holistic form of community forestry likely have their roots in the institutional mechanism itself, rather than in the efforts of communities. Flowing from the evaluation are recommendations for government to consider devolving more power over key strategic management decisions and increasing the size of CFAs to improve their economies of scale; and recommendations for communities to build their capacity and critical social mass to leverage policy changes that may further the evolution of community forestry in B.C.