Cite as:
Sepulveda C F, Martinez-Vazquez J, 2011, "The consequences of fiscal decentralization on poverty and income equality" Environment and Planning C: Government and Policy 29(2) 321 – 343
Download citation data in RIS format

The consequences of fiscal decentralization on poverty and income equality

Cristian F Sepulveda, Jorge Martinez-Vazquez

Received 7 February 2010, in revised form 21 December 2010

Abstract. Many countries around the world are currently pursuing policies for poverty reduction and the improvement of income distribution, and most of them are also implementing fiscal decentralization reforms. Although, separately, fiscal decentralization, poverty, and the distribution of income have been the subjects of extensive theoretical and empirical research, to date we have little understanding of what may be the impact of fiscal decentralization on poverty and inequality. We set out to shed some light on those relationships. We describe the possible channels through which fiscal decentralization might affect poverty and income inequalities and carry out an empirical analysis using panel data for a large number of countries. We find that fiscal decentralization may have significant effects on poverty and inequality. In particular, fiscal decentralization appears to lead to increases in the poverty measures we use, but it also appears to reduce income inequality if the general government represents a significant share of the economy (20% or more).

Restricted material:

 Full-text PDF size: 477 Kb

 References  66 references, 33 with DOI links ()

Your computer (IP address: 107.22.25.119) has not been recognised as being on a network authorised to view the full text or references of this article. If you are a member of a university library that has a subscription to the journal, please contact your serials librarian (subscriptions information).