Differential effects of decentralization on income inequality: evidence from developed and developing countries

Bojanic, Antonio N.; Collins, LaPorchia A.

doi:10.1007/s00181-019-01813-2

Cited by 17 publications

(19 citation statements)

References 37 publications

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“…These interactions are captured in the Cross-section fixed e ects were not utilized due to insu cient number of observations and hence lack of degrees of freedom. In line with Bojanic and Collins [10], in addition to testing whether decentralization in one dimension is moderated by the inverse Gini index, dual and tripartite decentralization are also tested. To do so, additional specifications that include all possible two-way and three-way interactions among fiscal, administrative, and political decentralization indicators, all moderated by the inverse Gini index, are estimated.…”

Section: Methodsmentioning

confidence: 99%

“…On the specific relationship between decentralization and income inequality, some studies conclude that decentralization lowers inequality. Representative works are Arze del Granado et al [6], Rodríguez-Pose and Ezcurra [7], Sepulveda and Martinez-Vazquez [8], Tselios et al [9], and Bojanic and Collins [10]. Others show that inequality worsens with greater decentralization, with Prud'homme [11], Peterson [12], Neyapti [13], and Sacchi and Salotti [14] being a sample of works in this regard.…”

Section: Introductionmentioning

confidence: 99%

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Tying decentralization and income redistribution to fight corruption: Empirical evidence from developed and developing countries

Bojanic

2023

Front. Appl. Math. Stat.

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Utilizing a panel data set for OECD and non-OECD countries for the period 1980–2016, I analyze the effects on corruption of interacting different forms of decentralization—fiscal, administrative, political, and overall decentralization—with an indicator of income inequality. The findings demonstrate that fiscal, administrative, and overall decentralization by themselves are not conducive to lowering corruption, but when moderated by the Gini index, corruption levels decrease in all countries. Moreover, as income inequality decreases, the impact of these forms of decentralization in lowering corruption increases, highlighting that decentralization can be an effective tool in combating corruption particularly when income inequality improves. The findings also demonstrate that in non-OECD countries, decentralization is an important tool to fight corruption up to high levels of inequality, proving that decentralization in developing countries is essential even when issues of income distribution have not been fully solved.

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Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Tying decentralization and income redistribution to fight corruption: Empirical evidence from developed and developing countries

Bojanic

2023

Front. Appl. Math. Stat.

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“…They suggested that control of corruption benefits fiscal decentralization. Bojanic & Collins (2021) analyzed fiscal, administrative, and political decentralization on income inequality in the panel data of OECD and non-OECD countries. The study found that, overall, fiscal decentralization decreases income inequality.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Previous literature has evidenced that the impact of fiscal decentralization on socioeconomic indicators may differ in income and regional groups of economies (Bojanic & Collins, 2021;Cavusoglu & Dincer, 2015;Rodríguez-Pose & Ezcurra, 2010). Rodriguez-Pose et al (2011) concluded that fiscal decentralization has varying effects on income inequality in developed and comparatively lesser developed regions of Europe.…”

Section: Introductionmentioning

confidence: 99%

Fiscal Decentralization and Gender Equality in Developing Economies: Dynamics of Income Groups in Economies and Corruption

Naeem

Khan

2021

5002

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A large number of studies on fiscal decentralization have supported the claim that decentralized governments have a greater capacity to approach local preferences and have greater potential for public service delivery, which demonstrates a favorable status of socioeconomic indicators. However, there is no empirical evidence on fiscal decentralization and gender equality. This study empirically examines the effect of fiscal decentralization on gender equality in 29 developing economies from 2006 to 2020 by employing the dynamic panel system generalized method of moments (GMM). The study uses three measures of fiscal decentralization—expenditure, revenue, and composite decentralization—to learn the dynamics of income groups in developing economies, and corruption from the perspective of fiscal decentralization and gender equality. The results demonstrate that fiscal decentralization improves gender equality in the sample of developing economies as well as in the sub-sample of developing economies, i.e., lower-middle income countries and upper-middle income countries subject to the control of corruption, otherwise fiscal decentralization may devastate gender equality in developing economies and upper-middle income economies. Corruption plays a dynamic role in the relationship between fiscal decentralization and gender equality. The desired results of fiscal decentralization may be attained through policy reforms to control corruption. The dynamics of income groups in the sampled economies also have implications for the relationship between fiscal decentralization and gender equality.

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“…The effects of inflation and institutional quality on income inequality in 65 developing and developed countries were detected by Law and Soon (2020), revealing that income inequality is increased by inflation and decreased by higher institutional quality. Using a sample of Organisation for Economic Co-operation and Development (OECD) and non-OECD countries, Bojanic and Collins (2021) noted that decentralization improve income distribution, while the effect reduces and finally reverses as economic development boosts, indicating that there exists a threshold at which the equality gains of decentralization are realized. They also found that the threshold of development at which greater decentralization no longer reduces inequality is lower for non-OECD countries than for OECD countries.…”

Section: Introductionmentioning

confidence: 99%

Fiscal illusion and income inequality: an empirical investigation

Zaroki

Barfurushi

Otaghsara

2023

IJSE

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PurposeThe present study investigates the role of fiscal illusion on income inequality in 46 selected countries in terms of income and development levels from 2002 to 2017.Design/methodology/approachThe effect of fiscal illusion on income inequality is tested using the two-step system generalized method of moment (SYS-GMM) estimator.FindingsThe findings reveal the negative effect of fiscal illusion on income inequality, which means increasing fiscal illusion decreases income inequality in 46 selected countries. As in other countries, income inequality declines when fiscal illusion increases in high-income and developed countries, although the redistributive effect of fiscal illusion is more in high-income and developed countries than in other countries. In addition, the results demonstrate the positive effect of unemployment, urbanization and inflation as well as the negative effect of trade openness on income inequality in all three models.Originality/valuePrevious studies have examined the role of government in controlling income inequality from different perspectives; however, no study has detected the role of government in income distribution regarding fiscal illusion.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2022-0311.

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Differential effects of decentralization on income inequality: evidence from developed and developing countries

Cited by 17 publications

References 37 publications

Tying decentralization and income redistribution to fight corruption: Empirical evidence from developed and developing countries

Tying decentralization and income redistribution to fight corruption: Empirical evidence from developed and developing countries

Fiscal Decentralization and Gender Equality in Developing Economies: Dynamics of Income Groups in Economies and Corruption

Fiscal illusion and income inequality: an empirical investigation

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