Decentralization in Africa and the nature of local governments' competition: evidence from Benin

Grégoire Rota-Graziosi (), Emilie Caldeira and Martial Foucault ()
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Grégoire Rota-Graziosi: Centre d'Etudes et de Recherches sur le Développement International(CERDI)
Authors registered in the RePEc Author Service: Grégoire ROTA GRAZIOSI

No 201019, Working Papers from CERDI

Abstract: Without denying particular dimensions of the decentralisation in Sub-Saharan countries, this paper applies standard reasoning from the fiscal federalism literature to a developing country and tests the existence of strategic interactions among local Beninese governments, called 'communes'. We first propose a two-jurisdiction model of public expenditure interactions, considering a constrained Nash equilibrium to capture the extreme poverty of some communes. We show that spillovers among jurisdictions involve strategic behaviours of local officials who have sufficient levels of fiscal resources. Second, by estimating a spatial lag model, our analysis provides evidence for the presence of strategic interactions in Benin, contingent on 'communes fiscal autonomy. Such interactions arise among communes which are geographically or ethnically close. We also highlight both an opportunistic behaviour of local governments before local elections and an effect of partisan affiliations. This African democracy appears to be as concerned as developed democracies with strategic fiscal interactions.

Keywords: Fiscal interactions; Benin; Decentralisation; Local government; Dynamic panel data (search for similar items in EconPapers)
JEL-codes: D72 H2 H7 (search for similar items in EconPapers)
Pages: 35
Date: 2010
New Economics Papers: this item is included in nep-afr, nep-pbe and nep-ure
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Citations: View citations in EconPapers (7)

Published in International Tax and Public Finance, 2015, pages 1048-1076
Published in International Tax and Public Finance

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Related works:
Journal Article: Decentralization in Africa and the nature of local governments’ competition: evidence from Benin (2015)
Working Paper: Decentralisation in Africa and the Nature of Local Governments' Competition: Evidence from Benin (2012)
Working Paper: Decentralisation in Africa and the Nature of Local Governments' Competition: Evidence from Benin (2012)
Working Paper: Decentralization in Africa and the nature of local governments' competition: evidence from Benin (2011)
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