Spatial Decentralization and Programme Evaluation: Theory and an Example

29 Pages Posted: 16 Apr 2019

See all articles by Mark M. Pitt

Mark M. Pitt

Brown University

Nidhiya Menon

Brandeis University - International Business School

Date Written: June 2019

Abstract

This paper proposes an instrumental variable method for programme evaluation that only requires a single cross‐section of data on the spatial intensity of programmes and outcomes. The instruments are derived from a simple theoretical model of government decision‐making in which governments are responsive to the attributes of places, rather than to the attributes of individuals, in making allocation decisions across space, and have a social welfare function that is spatially weakly separable, that is, that the budgeting process behaves as if it is multi‐stage with respect to administrative districts and sub‐districts. The spatial instrumental variables model is then estimated and tested with a single cross‐section of Indonesian census data. The results offer support to the identification strategy proposed but also highlight some issues affecting validity.

Suggested Citation

Pitt, Mark M. and Menon, Nidhiya, Spatial Decentralization and Programme Evaluation: Theory and an Example (June 2019). Oxford Bulletin of Economics and Statistics, Vol. 81, Issue 3, pp. 511-539, 2019. Available at SSRN: https://ssrn.com/abstract=3372505 or http://dx.doi.org/10.1111/obes.12265

Mark M. Pitt (Contact Author)

Brown University ( email )

Box B
Providence, RI 02912
United States
401-863-2970 (Phone)
401-863-1970 (Fax)

Nidhiya Menon

Brandeis University - International Business School ( email )

Mailstop 32
Waltham, MA 02454-9110
United States
781-736-2230 (Phone)
781-736-2269 (Fax)

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