Different dimensions of decentralization and rural–urban poverty in Pakistan

Abstract

The process of decentralization plays a vital role to enhance the welfare of society through the provision of public goods and services. This study investigates the impact of different dimensions of decentralization on rural-urban poverty and total poverty for Pakistan. For empirical analysis, this study uses time-series data covering the period from 1980 to 2018. The auto-regressive distributive lag model bounds testing cointegration method is used for long-run estimation and error correction dynamic for short-run movements of variables. The results show that fiscal and administrative decentralization are more beneficial for overall and rural-urban poverty reduction. The surprising results of political decentralization increases poverty overall in the case of Pakistan. For poverty reduction, the government should try to reduce the political concentration of elite groups in Pakistan. Moreover, to curtail poverty, government policy should be focused on effective strategies to address inflation and development of GDP per capita growth.

Tax Decentralization and Economic Growth of Pakistan: The Role of Political Institutions

“…Most of the empirical work (e.g., Enikolopov and Zhuravskaya, 2007) can be illuminated by the element that these contributions ignored in respect of the significance of political institutions. In fact, most studies determine the link between fiscal decentralization and performance of the economy by neglecting the role of political institutions, while, some researchers consider political institutions for exploring the impact of decentralization and economic development (Libman, 2010;Blanchard and Shleifer, 2000;Shahid, et al, 2022). The seminal work on fiscal federalism is done by (Riker 1964) and later on augmented this work by (Lago-Pen˜as et al, 2011;Filippetti and Sacchi, 2016).…”