Publication: Decentralization in Ethiopia--Who Benefits?
Loading...
Published
2015-12-01
ISSN
Date
2016-01-05
Author(s)
Chaurey, Ritam
Editor(s)
Abstract
This paper shows that greater autonomy to cities in Ethiopia through a process of city proclamations, led to better economic outcomes at the city level, lowering regional spatial inequalities. In addition, the newly-empowered cities did not seem to misuse their new powers by favoring particular firms over others. We investigate the effect of a nation-wide introduction of VAT in Ethiopia – and show that the intended recipients of the reform, i.e. importing firms performed better (in terms of employment and sales) only after the VAT introduction in decentralized cities with greater autonomy than in non-decentralized cities. This is suggestive evidence that increasing administrative powers (or the mayor’s wedge) played an important role in making Ethiopian cities more competitive, and allowed mayor’s to transmit more efficiently the effect of national-level reforms.
Link to Data Set
Citation
“Chaurey, Ritam; Mukim, Megha. 2015. Decentralization in Ethiopia--Who Benefits?. © World Bank. http://hdl.handle.net/10986/23574 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Empowering Cities : Good for Growth? Evidence from China(World Bank Group, Washington, DC, 2015-02)This paper utilizes a countrywide, county-to-city upgrade in the 1990s to identify whether extending the powers of urban local governments leads to better firm outcomes. The paper hypothesizes that since local leaders in newly-promoted cities have an incentive to utilize their new administrative remit to maximize gross domestic product and employment growth, there should be improvements in economic outcomes. The analysis finds that aggregate firm-level outcomes do not necessarily improve after county-to-city graduation. However, it does find that state-owned enterprises perform better post-graduation, with increased access to credit through state-owned banks as a possible explanation for the improvement in performance. The most important finding is that newly-promoted cities with high capacity generally produce better aggregate firm outcomes compared with newly-promoted cities with low capacity. The conclusions are twofold. First, in terms of access to credit, the paper provides evidence that relaxing credit constraints for firms could lead to large increases in firm operation and employment. Second, increasing local government's administrative remit is not enough to lead to better firm and economic outcomes; local capacity is of paramount importance.Publication City Planning Labs : A Concept for Strenghtening City Planning Capacity in Indonesia(World Bank, Washington, DC, 2013)The cities that emerge from Indonesia s rapid urbanization will be key determinants of the country s overall economic development and competitiveness, as well as their inclusiveness and environmental sustainability. However, without strategically planned investments, policy interventions, and institutional capacity, mismanaged urbanization could become an obstacle to sustainable growth. The city planning labs core module will be initially implemented in four cities: Surabaya, Palembang, Denpasar and Balikpapan, with two additional modules in each city. In the short term, the CPL will: (i) provide just in time , demand driven data and analysis that can feed into immediate decisions, and (ii) streamline ongoing urban management functions, such as building permitting and tax-related functions. In the medium term, it will provide cost-effective analytics to cities that can feed into planning and investment decisions, reducing the expense involved in contracting consultants during each planning cycle. In the long term, the CPL will build local technical capacity, by gathering expertise from Indonesia and international sources to work closely with local staff. Over time, external involvement will diminish as local capacity strengthens. The activities of the CPL will be conducted in modular fashion, each pertaining to a different sector. The sector modules are: instituting the city planning lab and spatial growth analytics (core module); city economic competitiveness; slum analytics and management systems; climate and risk resilience planning systems; and monitoring land and real estate markets.Publication City Analytics(World Bank, Washington, DC, 2015-12)interest in studying city competitiveness has skyrocketed in the past few years, although the topic itself is far from new. Mayors and city leaders have long worried about the obstacles to job creation, competitiveness, and economic growth that plague their cities. The objective of this paper is to present key findings from the quantitative analysis of the drivers of competitiveness in cites around the world.Publication Fiscal Competition in Developing Countries : A Survey of the Theoretical and Empirical Literature(2010-05-01)The last two decades have witnessed a sharp increase in foreign direct investment (FDI) flows and increased competition among developing countries to attract FDI, resulting in higher investment incentives offered by host governments and removal of restrictions on operations of foreign firms in their countries. Fiscal competition between governments can take the form of business tax rebates, productivity-enhancing public infrastructure or investment incentives such as tax holidays, accelerated depreciation allowances or loss carry-forward for income tax purposes. It can take place between governments of different countries or between local governments within the same country. This paper surveys the recent theoretical and empirical economic literature on decentralization which attempts to answer three questions. First, does theoretical literature on fiscal competition and "bidding races" contribute to a better understanding of such phenomenon in developing countries? Second, are FDI inflows in developing countries sensitive to fiscal incentives and is there empirical evidence of strategic behavior from the part of developing countries in order to attract FDI? Third, what evidence is there about fiscal competition among local governments in developing countries?Publication Mapping Serbia's Growth(Washington, DC, 2010-03-25)Big cities are becoming even bigger and these have been and will be the key drivers of economic growth in Serbia. Belgrade, Novi Sad, Nis and Kragujevac, Serbia's four largest cities contributed to about 60 percent of the increase of value added in the economy over the period 2001-2008. These four largest cities in 2008 accounted for about two thirds of country s economy. Spatial characteristics of foreign direct investments inflow, privatization process and location of export oriented sectors, indicate significant concentration. FDI and privatization were attracted by largest cities, though the proximity to the key transit routes, like Corridor 10, is also important for making decision where to invest. Export is concentrated in several places, depending on the type of production, and proximity of major export markets contributed to concentration of export near the borders of the EU (i.e., Hungary) and Bosnia and Herzegovina, the second most important export market for Serbia. Spatially uneven growth caused differences in living standards. Wages did not play significant role, as migrations did in adjusting differences in economic development among regions. Living standards are lowest in southern Serbia which has on average negative growth rates over this period and where both unemployment and poverty are highest. The last section of the report discusses some of the possible options for policy makers as response to spatially biased growth.
Users also downloaded
Showing related downloaded files
Publication The Power of Survey Design : A User's Guide for Managing Surveys, Interpreting Results, and Influencing Respondents(Washington, DC: World Bank, 2006)The vast majority of data used for economic research, analysis, and policy design comes from surveys-surveys of households, firms, schools, hospitals, and market participants, and, the accuracy of the estimate will depend on how well the survey is done. This innovative book is both a 'how-to' go about carrying out high-quality surveys, especially in the challenging environment of developing countries, and a 'user's guide' for anyone who uses statistical data. Reading this book will provide data users with a wealth of insight into what kinds of problems, or biases to look for in different data sources, based on the underlying survey approaches that were used to generate the data. In that sense the book is an invaluable 'skeptics guide to data'. Yet, the broad storyline of the book is something that should be absorbed by statistical data users. The book will teach and show how difficult it often is to obtain reliable estimates of important social and economic facts, and, therefore encourages you to approach all estimates with sensible caution.Publication World Development Report 2018(Washington, DC: World Bank, 2018)Every year, the World Bank's World Development Report takes on a topic of central importance to global development. The 2018 Report, Learning to Realize Education's Promise, is the first ever devoted entirely to education. Now is an excellent time for it: education has long been critical for human welfare, but is even more so in a time of rapid economic change. The Report explores four main themes. First, education's promise: Education is a powerful instrument for eradicating poverty and promoting shared prosperity, but fulfilling its potential requires better policies - both within and outside the education system. Second, the learning crisis: Despite gains in education access, recent learning assessments show that many young people around the world, especially from poor families, are leaving school unequipped with even the most foundational skills they need for life. At the same time, internationally comparable learning assessments show that skills in many middle-income countries lag far behind what those countries aspire to. Third, promising interventions to improve learning: Research from areas such as brain science, pedagogical innovations, or school management have identified interventions that promote learning by ensuring that learners are prepared, that teachers are skilled as well as motivated, and that other inputs support the teacher-learner relationship. Fourth, learning at scale: Achieving learning throughout an education system will require more than just scaling up effective interventions. Change requires overcoming technical and political barriers by deploying salient metrics for mobilizing actors and tracking progress, building coalitions for learning, and being adaptive when implementing programs.Publication World Development Report 2019(Washington, DC: World Bank, 2019)Work is constantly reshaped by technological progress. New ways of production are adopted, markets expand, and societies evolve. But some changes provoke more attention than others, in part due to the vast uncertainty involved in making predictions about the future. The 2019 World Development Report will study how the nature of work is changing as a result of advances in technology today. Technological progress disrupts existing systems. A new social contract is needed to smooth the transition and guard against rising inequality. Significant investments in human capital throughout a person’s lifecycle are vital to this effort. If workers are to stay competitive against machines they need to train or retool existing skills. A social protection system that includes a minimum basic level of protection for workers and citizens can complement new forms of employment. Improved private sector policies to encourage startup activity and competition can help countries compete in the digital age. Governments also need to ensure that firms pay their fair share of taxes, in part to fund this new social contract. The 2019 World Development Report presents an analysis of these issues based upon the available evidence.Publication World Development Report 2014(Washington, DC, 2013-10-06)The past 25 years have witnessed unprecedented changes around the world—many of them for the better. Across the continents, many countries have embarked on a path of international integration, economic reform, technological modernization, and democratic participation. As a result, economies that had been stagnant for decades are growing, people whose families had suffered deprivation for generations are escaping poverty, and hundreds of millions are enjoying the benefits of improved living standards and scientific and cultural sharing across nations. As the world changes, a host of opportunities arise constantly. With them, however, appear old and new risks, from the possibility of job loss and disease to the potential for social unrest and environmental damage. If ignored, these risks can turn into crises that reverse hard-won gains and endanger the social and economic reforms that produced these gains. The World Development Report 2014 (WDR 2014), Risk and Opportunity: Managing Risk for Development, contends that the solution is not to reject change in order to avoid risk but to prepare for the opportunities and risks that change entails. Managing risks responsibly and effectively has the potential to bring about security and a means of progress for people in developing countries and beyond. Although individuals’ own efforts, initiative, and responsibility are essential for managing risk, their success will be limited without a supportive social environment—especially when risks are large or systemic in nature. The WDR 2014 argues that people can successfully confront risks that are beyond their means by sharing their risk management with others. This can be done through naturally occurring social and economic systems that enable people to overcome the obstacles that individuals and groups face, including lack of resources and information, cognitive and behavioral failures, missing markets and public goods, and social externalities and exclusion. These systems—from the household and the community to the state and the international community—have the potential to support people’s risk management in different yet complementary ways. The Report focuses on some of the most pressing questions policy makers are asking. What role should the state take in helping people manage risks? When should this role consist of direct interventions, and when should it consist of providing an enabling environment? How can governments improve their own risk management, and what happens when they fail or lack capacity, as in many fragile and conflict-affected states? Through what mechanisms can risk management be mainstreamed into the development agenda? And how can collective action failures to manage systemic risks be addressed, especially those with irreversible consequences? The WDR 2014 provides policy makers with insights and recommendations to address these difficult questions. It should serve to guide the dialogue, operations, and contributions from key development actors—from civil society and national governments to the donor community and international development organizations.Publication Ten Steps to a Results-Based Monitoring and Evaluation System : A Handbook for Development Practitioners(Washington, DC: World Bank, 2004)An effective state is essential to achieving socio-economic and sustainable development. With the advent of globalization, there are growing pressures on governments and organizations around the world to be more responsive to the demands of internal and external stakeholders for good governance, accountability and transparency, greater development effectiveness, and delivery of tangible results. Governments, parliaments, citizens, the private sector, Non-governmental Organizations (NGOs), civil society, international organizations, and donors are among the stakeholders interested in better performance. As demands for greater accountability and real results have increased, there is an attendant need for enhanced results-based monitoring and evaluation of policies, programs, and projects. This handbook provides a comprehensive ten-step model that will help guide development practitioners through the process of designing and building a results-based monitoring and evaluation system. These steps begin with a 'readiness assessment' and take the practitioner through the design, management, and importantly, the sustainability of such systems. The handbook describes each step in detail, the tasks needed to complete each one, and the tools available to help along the way.