Decentralisation and Poverty Reduction: A Conceptual Framework for the Economic Impact

GIGA Working Paper No 3

31 Pages Posted: 8 Jun 2006 Last revised: 29 Aug 2014

See all articles by Susan Steiner

Susan Steiner

Institut für Iberoamerika-Kunde

Date Written: June 1, 2005

Abstract

This paper contributes to providing insights into the impact of decentralisation on poverty. It starts out with an overview of which role decentralisation plays in strategies and policies for poverty eradication and derives economic and political impact channels. It concentrates on the economic channel, the reasoning of which is rooted in fiscal federalism theory. It shows that decentralisation cannot only influence poverty by assigning expenditure responsibility to lower levels of government but also by assigning tax-raising power, which has so far been neglected by the literature. The paper concludes by pointing out a number of possible risks for realising the poverty-reducing potential of decentralisation.

Keywords: Local public goods, local revenue, poverty

JEL Classification: I38, H72, H71

Suggested Citation

Steiner, Susan, Decentralisation and Poverty Reduction: A Conceptual Framework for the Economic Impact (June 1, 2005). GIGA Working Paper No 3, Available at SSRN: https://ssrn.com/abstract=907265 or http://dx.doi.org/10.2139/ssrn.907265

Susan Steiner (Contact Author)

Institut für Iberoamerika-Kunde ( email )

Prol. Paseo de la Reforma, #880
Lomas de Santa Fe
Mexico, Distrito Federal 01210
Mexico

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