Political Capture of Decentralization: Vote-Buying Through Grants-Financed Local Jurisdictions

37 Pages Posted: 20 Apr 2016

See all articles by Stuti Khemani

Stuti Khemani

World Bank; World Bank - Development Research Group (DECRG)

Date Written: June 1, 2010

Abstract

A recent trend in decentralization in several large and diverse countries is the creation of local jurisdictions below the regional level -- municipalities, towns, and villages -- whose spending is almost exclusively financed by grants from both regional and national governments. This paper argues that such grants-financed decentralization enables politicians to target benefits to pivotal voters and organized interest groups in exchange for political support. Decentralization, in this model, is subject to political capture, facilitating vote-buying, patronage, or pork-barrel projects, at the expense of effective provision of broad public goods. There is anecdotal evidence on local politics in several large countries that is consistent with this theory. The paper explores its implications for international development programs in support of decentralization.

Keywords: Subnational Economic Development, Public Sector Economics, National Governance, Parliamentary Government, Banks & Banking Reform

Suggested Citation

Khemani, Stuti, Political Capture of Decentralization: Vote-Buying Through Grants-Financed Local Jurisdictions (June 1, 2010). World Bank Policy Research Working Paper No. 5350. Available at SSRN: https://ssrn.com/abstract=1630234

Stuti Khemani (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/skhemani

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

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