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Assessing the Effects of Decentralization on Economic Inequality, Human Development, and Economic Growth: A Simultaneous-Equations Models Analysis
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Martinez-Vazquez and McNab (2003) stress that the inconclusiveness of empirical results on the impacts of decentralization on economic growth might be due to the fact of assuming a simple direct link between them when there could exist an indirect, or even both. This suggests the need of evaluating the effects of decentralization on variables that represent a direct link, and which ultimately will have impacts on economic growth, representing the indirect link. This humble work undertakes this task by empirically assessing the direct impact of political and fiscal decentralization on the human development index (HDI) and economic inequality (Gini Index), postulating positive relationship between them. Then, the analysis depicts a model that integrates the indirect and direct impacts between decentralization and economic growth, suggesting that the impact of decentralization on economic growth is moderated by a specific country’s economic development. In testing the hypothesized relations, we design simultaneous-equation models (SEM) with exogenous latent variable and employ cross sectional data for 68 countries, constructing average values for all analytical variables in the decade from 1980 to 1999. Preliminary findings report that decentralization has no homogeneous impact across countries with different economic development neither across variables. The implications of this study point at a very sensitive area: poverty alleviation, as improvement or deterioration of HDI and income inequality are translated into reduction or increase of poverty respectively.
Most Common Document Word Stems: decentr (228), econom (146), incom (132), growth (102), develop (91), 1 (83), variabl (76), effect (75), countri (73), middl (62), x (57), direct (55), 0 (53), inequ (52), polit (52), fiscal (52), 3 (50), govern (48), 2 (47), hdi (45), high (42),

Author's Keywords: Decentralization, Human Development, Social Inequality, Economic Growth, Simultaneous-Equations Models	Convention Convention is an application service for managing large or small academic conferences, annual meetings, and other types of events! Submission - Custom fields, multiple submission types, tracks, audio visual, multiple upload formats, automatic conversion to pdf. Review - Peer Review, Bulk reviewer assignment, bulk emails, ranking, z-score statistics, and multiple worksheets! Reports - Many standard and custom reports generated while you wait. Print programs with participant indexes, event grids, and more! Scheduling - Flexible and convenient grid scheduling within rooms and buildings. Conflict checking and advanced filtering. Communication - Bulk email tools to help your administrators send reminders and responses. Use form letters, a message center, and much more! Management - Search tools, duplicate people management, editing tools, submission transfers, many tools to manage a variety of conference management headaches! Click here for more information.
Association: Name: The Midwest Political Science Association URL: http://www.indiana.edu/~mpsa/
Citation: URL: http://www.allacademic.com/meta/p86841_index.html Direct Link: HTML Code:

Meng, Chih-cheng. and Avellaneda, Claudia. "Assessing the Effects of Decentralization on Economic Inequality, Human Development, and Economic Growth: A Simultaneous-Equations Models Analysis" Paper presented at the annual meeting of the The Midwest Political Science Association, Palmer House Hilton, Chicago, Illinois, Apr 07, 2005 Online <.PDF>. 2008-06-27 <http://www.allacademic.com/meta/p86841_index.html>

Meng, C. and Avellaneda, C. N. (2005, Apr) "Assessing the Effects of Decentralization on Economic Inequality, Human Development, and Economic Growth: A Simultaneous-Equations Models Analysis" Paper presented at the annual meeting of the The Midwest Political Science Association, Palmer House Hilton, Chicago, Illinois Online <.PDF> Retrieved 2008-06-27 from http://www.allacademic.com/meta/p86841_index.html

Publication Type: Conference Paper/Unpublished Manuscript Review Method: Peer Reviewed Abstract: Martinez-Vazquez and McNab (2003) stress that the inconclusiveness of empirical results on the impacts of decentralization on economic growth might be due to the fact of assuming a simple direct link between them when there could exist an indirect, or even both. This suggests the need of evaluating the effects of decentralization on variables that represent a direct link, and which ultimately will have impacts on economic growth, representing the indirect link. This humble work undertakes this task by empirically assessing the direct impact of political and fiscal decentralization on the human development index (HDI) and economic inequality (Gini Index), postulating positive relationship between them. Then, the analysis depicts a model that integrates the indirect and direct impacts between decentralization and economic growth, suggesting that the impact of decentralization on economic growth is moderated by a specific country’s economic development. In testing the hypothesized relations, we design simultaneous-equation models (SEM) with exogenous latent variable and employ cross sectional data for 68 countries, constructing average values for all analytical variables in the decade from 1980 to 1999. Preliminary findings report that decentralization has no homogeneous impact across countries with different economic development neither across variables. The implications of this study point at a very sensitive area: poverty alleviation, as improvement or deterioration of HDI and income inequality are translated into reduction or increase of poverty respectively.

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