Publication: Blending Top-Down Federalism with Bottom-Up Engagement to Reduce Inequality in Ethiopia
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Date
2017-08
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0305-750X
Published
2017-08
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Donors increasingly fund interventions to counteract inequality in developing countries, where they fear it can foment instability and undermine nation-building efforts. To succeed, aid relies on the principle of upward accountability to donors. But federalism shifts the accountability of subnational officials downward to regional and local voters. What happens when aid agencies fund anti-inequality programs in federal countries? Does federalism undermine aid? Does aid undermine federalism? Or can the political and fiscal relations that define a federal system resolve the contradiction internally? We explore this paradox via the Promotion of Basic Services program in Ethiopia, the largest donor-financed investment program in the world. Using an original panel database comprising the universe of Ethiopian woredas (districts), the study finds that horizontal (geographic) inequality decreased substantially. Donor-financed block grants to woredas increased the availability of primary education and health care services in the bottom 20% of woredas. Weaker evidence from household surveys suggests that vertical inequality across wealth groups (within woredas) also declined, implying that individuals from the poorest households benefit disproportionately from increasing access to, and utilization of, such services. The evidence suggests that by combining strong upward accountability over public investment with enhanced citizen engagement on local issues, Ethiopia’s federal system resolves the instrumental dissonance posed by aid-funded programs to combat inequality in a federation.
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Publication Blending Top-Down Federalism with Bottom-Up Engagement to Reduce Inequality in Ethiopia(World Bank, Washington, DC, 2015-12)Donors increasingly fund interventions to counteract inequality in developing countries, where they fear it can foment instability and undermine nation-building efforts. To succeed, aid relies on the principle of upward accountability to donors. But federalism shifts the accountability of subnational officials downward to regional and local voters. What happens when aid agencies fund anti-inequality programs in federal countries? Does federalism undermine aid? Does aid undermine federalism? Or can the political and fiscal relations that define a federal system resolve the contradiction internally? This study explores this paradox via the Promotion of Basic Services program in Ethiopia, the largest donor-financed investment program in the world. Using an original panel database comprising the universe of Ethiopian woredas (districts), the study finds that horizontal (geographic) inequality decreased substantially. Donor-financed block grants to woredas increased the availability of primary education and health care services in the bottom 20 percent of woredas. Weaker evidence from household surveys suggests that vertical inequality across wealth groups (within woredas) also declined, implying that individuals from the poorest households benefit disproportionately from increasing access to and utilization of such services. The evidence suggests that by combining strong upward accountability over public investment with extensive citizen engagement on local issues, Ethiopia’s federal system resolves the instrumental dissonance posed by aid-funded programs to combat inequality in a federation.Publication Improving Basic Services for the Bottom Forty Percent : Lessons from Ethiopia(Washington, DC: World Bank, 2014-09-02)Ethiopia, like most developing countries, has opted to deliver services such as basic education, primary health care, agricultural extension advice, water, and rural roads through a highly decentralized system (Manor 1999; Treisman 2007). That choice is based on several decades of theoretical analysis examining how a decentralized government might respond better to diverse local needs and provide public goods more efficiently than a highly centralized government. Ethiopia primarily manages the delivery of basic services at the woreda (district) level. Those services are financed predominantly through intergovernmental fiscal transfers (IGFTs) from the federal to the regional and then the woreda administrations, although some woredas raise a small amount of revenue to support local services. Since 2006, development partners and the government have cofinanced block grants for decentralized services through the Promoting Basic Services (PBS) Program. Aside from funding the delivery of services, the program supports measures to improve the quality of services and local governments capacity to deliver them by strengthening accountability and citizen voice.Publication Decentralization’s Effects on Education and Health(World Bank, Washington, DC, 2019-09)The authors explore the effects of decentralization on education and health in Ethiopia using an original database covering all of the country’s regions and woredas (local governments). Ethiopia is a remarkable case in which war, famine and chaos in the 1970s-1980s were followed by federalization, decentralization, rapid growth and dramatic improvements in human development. Did decentralization contribute to these successes? The authors use time series and panel data analyses to show that decentralization improved net enrollments in primary schools and access to antenatal care for pregnant women. The main channel appears to be institutional, not fiscal. The authors offer the database as an additional contribution.Publication Maternal and Child Health Inequalities in Ethiopia(World Bank, Washington, DC, 2015-12)Recent surveys show considerable progress in maternal and child health in Ethiopia. The improvement has been in health outcomes and health services coverage. The study examines how different groups have fared in this progress. It tracked 11 health outcome indicators and health interventions related to Millennium Development Goals 1, 4, and 5. These are stunting, underweight, wasting, neonatal mortality, infant mortality, under-five mortality, measles vaccination, full immunization, modern contraceptive use by currently married women, antenatal care visits, and skilled birth attendance. The study explores trends in inequalities by household wealth status, mothers’ education, and place of residence. It is based on four Demographic and Health Surveys implemented in 2000, 2005, 2011, and 2014. Trends in rate differences and rate ratios are analyzed. The study also investigates the dynamics of inequalities, using concentration curves for different years. In addition, a decomposition analysis is conducted to identify the role of proximate determinants. The study finds substantial improvements in health outcomes and health services. Although there still exists a considerable gap between the rich and the poor, the study finds some reductions in inequalities of health services. However, some of the improvements in selected health outcomes appear to be pro-rich.Publication Maternal and Child Health Inequalities in Ethiopia(Washington, DC, 2015-12)Recent surveys show considerable progress in maternal and child health in Ethiopia. The improvement has been in health outcomes and health services coverage. The study examines how different groups have fared in this progress. It tracked 11 health outcome indicators and health interventions related to millennium development goals one, four, and five. These are stunting, underweight, wasting, neonatal mortality, infant mortality, under -five mortality, measles vaccination, and full immunization, modern contraceptive use by currently married women, antenatal care visits, and skilled birth attendance. Trends in rate differences and rate ratios are analyzed. The study also investigates the dynamics of inequalities, using concentration curves for different years. In addition, a decomposition analysis is conducted to identify the role of proximate determinants. The study finds substantial improvements in health outcomes and health services. Although there still exists a considerable gap between the rich and the poor, the study finds some reductions in inequalities of health services. However, some of the improvements in selected health outcomes appear to be pro-rich.
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