Decentralization, Local Government Fiscal Independence, and Poverty: Evidence from Philippine Provinces

Decentralization has become a popular development program among middle- and low-income economies worldwide. The rationale behind decentralization is the local government’s proximity to consumers gives it an information advantage over the central government on needs and preferences. However, the cent...

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Main Author: Canare, Tristan A
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Published: Archīum Ateneo 2020
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Online Access:https://archium.ateneo.edu/economics-faculty-pubs/176
https://archium.ateneo.edu/cgi/viewcontent.cgi?article=1161&context=economics-faculty-pubs
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spelling ph-ateneo-arc.economics-faculty-pubs-11612022-02-16T03:01:09Z Decentralization, Local Government Fiscal Independence, and Poverty: Evidence from Philippine Provinces Canare, Tristan A Decentralization has become a popular development program among middle- and low-income economies worldwide. The rationale behind decentralization is the local government’s proximity to consumers gives it an information advantage over the central government on needs and preferences. However, the central government has economies of scale and has access to more resources. Using data from Philippine provinces, this paper studies the relationship between decentralization – as represented by local government fiscal independence and as measured by locally sourced revenues expressed as share of total revenue – and poverty incidence. It finds evidence that fiscal independence is associated with lower poverty, but the relationship is not linear. There is an optimal level of decentralization, beyond which, its relationship with poverty becomes positive. Moreover, the decentralization-poverty relationship is stronger in provinces with good governance, and weaker in provinces with lower income. 2020-11-27T08:00:00Z text application/pdf https://archium.ateneo.edu/economics-faculty-pubs/176 https://archium.ateneo.edu/cgi/viewcontent.cgi?article=1161&context=economics-faculty-pubs Economics Department Faculty Publications Archīum Ateneo decentralization poverty fiscal independence Philippines Economics Public Affairs, Public Policy and Public Administration
institution Ateneo De Manila University
building Ateneo De Manila University Library
continent Asia
country Philippines
Philippines
content_provider Ateneo De Manila University Library
collection archium.Ateneo Institutional Repository
topic decentralization
poverty
fiscal independence
Philippines
Economics
Public Affairs, Public Policy and Public Administration
spellingShingle decentralization
poverty
fiscal independence
Philippines
Economics
Public Affairs, Public Policy and Public Administration
Canare, Tristan A
Decentralization, Local Government Fiscal Independence, and Poverty: Evidence from Philippine Provinces
description Decentralization has become a popular development program among middle- and low-income economies worldwide. The rationale behind decentralization is the local government’s proximity to consumers gives it an information advantage over the central government on needs and preferences. However, the central government has economies of scale and has access to more resources. Using data from Philippine provinces, this paper studies the relationship between decentralization – as represented by local government fiscal independence and as measured by locally sourced revenues expressed as share of total revenue – and poverty incidence. It finds evidence that fiscal independence is associated with lower poverty, but the relationship is not linear. There is an optimal level of decentralization, beyond which, its relationship with poverty becomes positive. Moreover, the decentralization-poverty relationship is stronger in provinces with good governance, and weaker in provinces with lower income.
format text
author Canare, Tristan A
author_facet Canare, Tristan A
author_sort Canare, Tristan A
title Decentralization, Local Government Fiscal Independence, and Poverty: Evidence from Philippine Provinces
title_short Decentralization, Local Government Fiscal Independence, and Poverty: Evidence from Philippine Provinces
title_full Decentralization, Local Government Fiscal Independence, and Poverty: Evidence from Philippine Provinces
title_fullStr Decentralization, Local Government Fiscal Independence, and Poverty: Evidence from Philippine Provinces
title_full_unstemmed Decentralization, Local Government Fiscal Independence, and Poverty: Evidence from Philippine Provinces
title_sort decentralization, local government fiscal independence, and poverty: evidence from philippine provinces
publisher Archīum Ateneo
publishDate 2020
url https://archium.ateneo.edu/economics-faculty-pubs/176
https://archium.ateneo.edu/cgi/viewcontent.cgi?article=1161&context=economics-faculty-pubs
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