No abstract

No abstract

We investigate the empirical relationship between decentralisation and corruption. Using a newly assembled dataset containing data for up to 174 countries, we revisit the empirical evidence and seek to explain some of the inconsistent results that exist in the literature. We find that not only results differ due to the use of different specifications and data but more importantly because previous research overlooks the relationship between different dimensions of decentralisation. We propose an approach aimed at exploring the aggregate effect of decentralization on corruption. In this context, we analyze the existence of direct and indirect effects of these aspects on corruption. Our results suggest that fiscal (market) decentralisation is associated with lower corruption. However, we also find that constitutional decentralisation (federalism) is associated with higher corruption. Furthermore, we find that certain forms of political decentralisation worsen the positive effect of constitutional centralization on corruption. Finally, other forms of decentralisation such as spatial decentralisation do not appear to have a strong association with corruption. Our results suggest the possibility that previous empirical work may grossly overestimate de aggregate impact of decentralization and corruption.

We examine the impact of decentralized public policy in the form of intergovernmental fiscal transfers on local election outcomes –the probability of reelection. We assemble a new and unique dataset recording every local executive election in the period 1995-2011 and examine the electoral effect of various types of intergovernmental fiscal transfers. We find that the odds of reelecting local incumbents are increasing in the incumbency dummies for both major parties. Local governments which receive a positive discretionary transfer from the provincial government have also associated higher odds of being reelected. The probability of reelection is also increasing in the difference in the vote share between the winner and the runner-up in the previous election. Finally, we find evidence that the amount of discretionary transfers per capita affect positively the probability of reelection only in those governments aligned with the provincial government. Our results are robust to controlling for other potential explanatory variables.