How Effective Is Fiscal Decentralization for Inequality Reduction in Developing Countries?

Kumba Digdowiseiso*, Syed M. Murshed, Sylvia I. Bergh

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

5 Citations (Scopus)
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The relationship between fiscal decentralization and vertical inequality has long received attention by fiscal federalism theorists. However, horizontal inequality has been largely overlooked. This study will present a novel empirical examination of the relationship between fiscal decentrali-zation, vertical inequality, and horizontal inequality. Specifically, it will focus on how institutional quality and military expenditure affect the fiscal decentralization–inequality nexus across 33 developing countries in the period 1990–2014. Findings indicate that varieties of fiscal authority have a significant effect on distribution of income and ethnic inequality. This depends on the level of institutions and defense spending achieved by these developing countries.

Original languageEnglish
Article number505
JournalSustainability (Switzerland)
Issue number1
Publication statusPublished - 4 Jan 2022

Bibliographical note

Funding: The APC was funded by the Development Economics research group at the International Institute of Social Studies, Erasmus University Rotterdam.

Publisher Copyright:
© 2022 by the authors. Licensee MDPI, Basel, Switzerland.

Research programs

  • ISS-CI
  • ISS-DE


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