Khemani, Stuti2012-03-192012-03-192010-06-01https://hdl.handle.net/10986/3835A recent trend in decentralization in several large and diverse countries is the creation of local jurisdictions below the regional level -- municipalities, towns, and villages -- whose spending is almost exclusively financed by grants from both regional and national governments. This paper argues that such grants-financed decentralization enables politicians to target benefits to pivotal voters and organized interest groups in exchange for political support. Decentralization, in this model, is subject to political capture, facilitating vote-buying, patronage, or pork-barrel projects, at the expense of effective provision of broad public goods. There is anecdotal evidence on local politics in several large countries that is consistent with this theory. The paper explores its implications for international development programs in support of decentralization.CC BY 3.0 IGOAFFILIATESANTI-CORRUPTIONAUDITINGAUDITSAUTHORITYBENEFIT INCIDENCEBUDGET CONSTRAINTBUDGET CONSTRAINTSCASH ASSISTANCECASH TRANSFERSCENTRAL GOVERNMENTCITIESCITIZENSCIVIL SOCIETYCOMMUNITY ORGANIZATIONCOMMUNITY PARTICIPATIONCOMMUNITY-DRIVEN DEVELOPMENTCOMPARATIVE PERSPECTIVECONGRESSMANCONSTITUENCIESCONSTITUENCYCONSTITUENTSCONSTITUTIONCONSTITUTIONAL AMENDMENTCONSTITUTIONSDECENTRALIZATIONDECENTRALIZATION IN GOVERNMENTDECENTRALIZATION REFORMSDECISION-MAKINGDECREEDEMOCRACIESDEMOCRACYDEMOCRATIZATIONDEVOLUTIONDISCLOSUREDISCLOSURE OF INFORMATIONDISTRICTDISTRICT MUNICIPALITIESDISTRICTSECONOMIC ELITESECONOMIC GROWTHECONOMIC SHOCKSELECTIONELECTORAL POLITICSELECTRICITYEMPLOYMENTEQUALIZATIONEXPENDITUREEXPENDITURE RESPONSIBILITIESFEDERATIONSFISCAL CAPACITYFISCAL CENTRALIZATIONFISCAL DECENTRALIZATIONFISCAL DISCIPLINEFISCAL EQUALIZATIONFISCAL FEDERALISMFISCAL PERFORMANCEFISCAL POLICIESFISCAL POLICYGAMBLINGGERRYMANDERINGGOVERNMENT FINANCEGOVERNMENT POLICYGOVERNMENT STRATEGYGOVERNMENT STRUCTURESHEALTH SERVICESINSTITUTIONAL MECHANISMINSTITUTIONAL REFORMINTERGOVERNMENTAL TRANSFERSINTERNATIONAL DEVELOPMENTLEGISLATIVE DECISIONLEGISLATORLEGISLATORSLEGISLATURESLEVEL OF TAXATIONLEVELS OF GOVERNMENTLOCAL AUTONOMYLOCAL BODIESLOCAL ELECTIONSLOCAL EXPENDITURESLOCAL GOVERNMENTLOCAL GOVERNMENT ACCOUNTABILITYLOCAL GOVERNMENT AUTHORITIESLOCAL GOVERNMENT EXPENDITURESLOCAL GOVERNMENT REVENUESLOCAL GOVERNMENT SPENDINGLOCAL GOVERNMENT STRUCTURESLOCAL GOVERNMENTSLOCAL PUBLIC GOODSLOCAL PUBLIC SERVICESLOCAL REVENUELOCAL SPENDINGMAYORSMUNICIPAL GOVERNMENTMUNICIPAL GOVERNMENT EXPENDITURESMUNICIPAL GOVERNMENTSMUNICIPAL REVENUESMUNICIPALITIESMUNICIPALITYNATIONAL ELECTIONSNATIONAL GOVERNMENTSNATIONAL PARLIAMENTNATIONALSNET TAX BURDENPANCHAYATSPARLIAMENTPOLICY CHOICESPOLICY ISSUESPOLICY OBJECTIVESPOLICY STUDIESPOLITICAL COMPETITIONPOLITICAL DECENTRALIZATIONPOLITICAL INSTITUTIONSPOLITICAL MOBILIZATIONPOLITICAL PARTICIPATIONPOLITICAL PARTIESPOLITICAL PARTYPOLITICIANSPRIVATE GOODSPROVINCEPROVINCESPROVINCIAL GOVERNORSPUBLICPUBLIC ACTIONPUBLIC AGENCIESPUBLIC AGENCYPUBLIC ECONOMICSPUBLIC EXPENDITUREPUBLIC EXPENDITURE REVIEWPUBLIC FINANCEPUBLIC FINANCIAL MANAGEMENTPUBLIC FUNDSPUBLIC GOODPUBLIC HEALTHPUBLIC INFRASTRUCTUREPUBLIC INTERESTPUBLIC INVESTMENTPUBLIC OFFICIALSPUBLIC PARTICIPATIONPUBLIC POLICIESPUBLIC POLICYPUBLIC RESOURCESPUBLIC SERVICEPUBLIC SERVICE DELIVERYPUBLIC SPENDINGPUBLIC SPENDING PROGRAMSREDISTRIBUTIONREPRESENTATIVE DEMOCRACYRESOURCE ALLOCATIONREVENUE ASSIGNMENTSREVENUE-RAISING POTENTIALREVENUE-RAISING POWERREVOLUTIONROADSSOCIAL CAPITALSOCIAL COSTSOCIAL NETWORKSSTATE GOVERNMENTSTATE GOVERNMENTSSTRUCTURE OF GOVERNANCESUBNATIONALSUBNATIONAL FINANCESUFFRAGETAXTAX BASESTAX COLLECTIONTAX DECENTRALIZATIONTAX EVASIONTAX RATETAX RATESTAX REVENUETAX REVENUESTAX SYSTEMTECHNICAL ASSISTANCETOWNSUSER CHARGESUTILITIESVILLAGEVILLAGE GOVERNMENTSVILLAGESVOTINGWAGESWorld Bank10.1596/1813-9450-5350