This paper surveys recent contributions to the study of fiscal decentralization which adopt a political economy approach. It is argued that this approach can capture, in a variety of formal models, the plausible and influential ideas (increasingly, supported by empirical evidence) that fiscal decentralization can lead to improved preference-matching and accountability of government. In particul...

The relationship between decentralization of government activities and the extent of rent extraction by private parties is an important element in the recent debate on institutional design. The theoretical literature makes ambiguous predictions about this relationship, and it has remained virtually unexamined by empiricists. In this paper, we make a first attempt at examining this issue empiric...

In this paper, we shall discuss some notions of decentralization and coordination in the control of large-scale dynamic systems. Decentralization and coordination have always been important concepts in the study of large systems. Roughly speaking, decentralization is the process of dividing a large problem into subproblems so that it can be handled more easily. Coordination is the manipulation ...

This note discusses the interface between community-driven development (CDD) and decentralization. In particular, it focuses on the aspects of decentralization programs related to local government capacity building, where the practical application of CDD principles becomes meaningful. The note considers how the principles of CDD are being incorporated into local government capacity building pro...

Do political and fiscal decentralization make it easier or harder to control inflation? If high inflation reflects the time inconsistency problem, devolving power might restrict the center’s ability to renege on promises of monetary stability, thus reducing inflation. If inflation results from failure to coordinate on a stabilization plan, devolving power to numerous regional governments should...

— This study is the first attempt to examine the determinants of expenditure decentralization at sub-provincial levels in China. The Chinese central government gives detailed guidelines to local governments on public finance, but, ironically, their expenditure assignment is far from being well-regulated. Differences in fiscal decentralization on the expenditure side are enormous among local gov...

Decision-makers and aid agency professionals in a number of transitional and developing countries are increasingly turning to “administrative decentralization” as a strategy for addressing a number of critical governmental needs. Foremost among these are improved governance, increased transparency and accountability, and more effective and efficient production and delivery of public goods and s...