Description: Decentralization (Localization) and Corruption : New Cross-Country Evidence

Decentralization (Localization) and Corruption : New Cross-Country Evidence

This paper attempts to improve the understanding and measurement of decentralization and its relationship with corruption in a worldwide context. This is done by presenting the conceptual underpinnings of such relationship as well as using superior...

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Bibliographic Details
Main Authors:	Ivanyna, Maksym, Shah, Anwar
Language:	English
Published:	2012
Subjects:	ABUSE ACCOUNTABILITY ACCOUNTABILITY IN GOVERNANCE ACCOUNTING ADMINISTRATIVE AUTONOMY ADMINISTRATIVE DECENTRALIZATION ASSETS AUDITS AVERAGE PERSON BRIBE BRIBERY BRIBES BUREAUCRACY CAUSAL EFFECT CENSORSHIP CENTRAL AGENCIES CENTRAL GOVERNMENT CENTRAL GOVERNMENTS CENTRAL INSTITUTIONS CITIES CITIZEN CITIZEN PARTICIPATION CITIZENS COEFFICIENTS COMPARATIVE ANALYSIS CONFIDENCE CONSOLIDATION CONSTITUTION CONSUMPTION NEEDS CONTROLLING CORRUPTION CORRUPTION CORRUPTION PERCEPTION CORRUPTION PERCEPTION INDEX CORRUPTION PERCEPTIONS CORRUPTION VARIABLE CORRUPTION VARIABLES COUNCILS COUNTRY AVERAGE COUNTRY COMPARISONS COUNTRY DATA COUNTRY EXPERTS CPI CRISES DECENTRALIZATION DECISION MAKING DECISION MAKING PROCESS DEMOCRACY DEMOCRATIC INSTITUTIONS DISCRETION ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC GROWTH EMPLOYMENT EXECUTIVE BODIES EXPENDITURE EXPENDITURE DECENTRALIZATION EXPENDITURES FEDERAL COUNTRIES FEDERALISM FISCAL DECENTRALIZATION FISCAL DISCIPLINE FISCAL FEDERALISM FISCAL VARIABLES GOOD GOVERNANCE GOVERNMENT ACCOUNTABILITY GOVERNMENT FINANCE GOVERNMENT LEVEL GOVERNMENT OFFICIAL GOVERNMENT OFFICIALS GOVERNOR HEALTH SERVICES INCOME INFORMAL PAYMENT INFORMAL PAYMENTS INSTITUTIONAL ARRANGEMENTS INTEGRITY INVESTIGATIONS INVESTMENT CLIMATE LABOR MARKET LEADERSHIP LEGAL ORIGIN LEGISLATION LEGISLATIVE BODIES LEGISLATIVE COUNCIL LEGISLATURE LOCAL ACCOUNTABILITY LOCAL DECISION MAKING LOCAL EXPENDITURES LOCAL GOVERNANCE LOCAL GOVERNMENT LOCAL GOVERNMENTS LOCAL TAXES LOW INCOME COUNTRIES MACROECONOMIC MANAGEMENT MASS MEDIA MAYOR MEASUREMENT ERROR MEASUREMENT ERRORS MEDIA MOTIVATIONS MUNICIPAL SERVICES MUNICIPALITIES NATIONAL ACCOUNTS NATIONS PETTY CORRUPTION POLICE POLICE FORCES POLITICAL ACCOUNTABILITY POLITICAL AUTONOMY POLITICAL DECENTRALIZATION POLITICAL INSTITUTIONS POLITICIANS PRIVATE GAIN PROBABILITY MODELS PROVINCES PUBLIC ECONOMICS PUBLIC EMPLOYEES PUBLIC ENTITY PUBLIC FINANCE PUBLIC GOVERNANCE PUBLIC HEALTH PUBLIC HEARINGS PUBLIC OFFICIALS PUBLIC SECTOR REFERENDUM REFERENDUMS REMEDY REPRESENTATIVES REVOLUTION SERVICE DELIVERY SOCIAL JUSTICE SOCIAL SECURITY STATE GOVERNMENT STATE GOVERNMENTS STATISTICAL ESTIMATION SUB-NATIONAL SUB-NATIONAL EXPENDITURE SUB-NATIONAL UNITS SUBNATIONAL SUBNATIONAL GOVERNMENTS TAX TAX DECENTRALIZATION TAX INSPECTIONS TAX REVENUES TAX SHARING TAXATION THEFT TRANSACTION COSTS TRANSPARENCY
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100510090347 http://hdl.handle.net/10986/3785

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Summary:	This paper attempts to improve the understanding and measurement of decentralization and its relationship with corruption in a worldwide context. This is done by presenting the conceptual underpinnings of such relationship as well as using superior and more defensible measures of both decentralization in its various dimensions as well as corruption for a sample of 182 countries. It is the first paper that treats various tiers of local governments (below the inter-mediate order of government) as the unit of comparative analysis. In contrast, previous analyses erroneously focused on subnational governments as the unit of analysis which yields invalid cross-country comparisons. By pursuing rigorous econometric analysis, the paper demonstrates that decentralization, when properly measured to mean moving government closer to people by empowering local governments, is shown to have significant negative effect on the incidence of corruption regardless of the choice of the estimation procedures or the measures of corruption used. In terms of various dimensions of decentralized local governance, political decentralization matters even when we control for fiscal decentralization. Further voice (political accountability) is empirically shown to be more important in combating corruption than exit options made available through competition among jurisdictions.

Decentralization (Localization) and Corruption : New Cross-Country Evidence

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