ACADEMIC PAPER
Types o decen alisa ion and go e nance: E idence om
ac oss he wo ld
Ped o J. Camões
CICP/Uni e sidade do Minho, Po ugal
Co espondence
Ped o J. Camões, CICP/Uni e sidade do
Minho, Po ugal.
Email: [email p o ec ed].p
Funding in o ma ion
Fundaç~
ao pa a a Ciência e a Tecnologia
The ela ionship be ween decen alisa ion and quali y o go e nmen is heo e i-
cally ambi alen and emains empi ically mixed. The classical heo y a gues ha
decen alisa ion imp o es he abili y o go e nmen s o ully espond o collec i e
p e e ences. A di e en pe spec i e poin s o some disad an ages ela ed o p ob-
lems o coo dina ion and ine ia. This pape p o ides a wo ldwide c oss-sec ional
analysis ha es s hese wo con as ing iews and he e ec o democ acy. The
esul s obus ly suppo ha (a) decen alisa ion has an independen and posi i e
e ec on he quali y o go e nmen , bu ha (b) poli ical, iscal and adminis a i e
ypes o decen alisa ion ha e qui e di e en e ec s and ha (c) he e ec is a en-
ua ed when he e ec o democ acy is conside ed. Toge he , hese esul s shed
ligh wi h ega d o he op imal design o e o ms owa ds decen alisa ion ac oss
he wo ld.
1|INTRODUCTION
Decen alisa ion, he e i o ial o ganisa ion o he s a e and public
sec o s, and i s ela ion wi h go e nmen pe o mance is an impo an
elemen in he ecen deba e on ins i u ional design. Bu i is no a
new deba e. Small go e nmen s in he o m o small e i o ies ha e
been p aised since Pla o, A is o le, Rosseau, Mon esquieu and J. S.
Mill, among o he s. These a angemen s a e ega ded as app op ia e
o p o ec he indi idual igh s agains y anny o he majo i y and o
encou age poli ical pa icipa ion and he accommoda ion. Pa icula ly,
libe al au ho s we e specially keen on p aising he ci ic i ues o local
democ acy. Fo example, de Tocque ille claimed ha “municipal ins i-
u ions cons i u e he s eng h o ee na ions. Town mee ings a e o
libe y wha p ima y schools a e o science. A na ion may es ablish a
ee go e nmen , bu wi hou municipal ins i u ions, i canno ha e
he spi i o libe y.”To J. S. Mill, ‘ ee and popula municipal ins i u-
ions’a e pa o he “peculia aining o a ci izen”, and he p ac ical
pa o he poli ical educa ion o a ee people. Acco dingly, ‘mode n
go e nmen al sys ems, e en hose o uni a y s a es, a e all mul ile el
sys ems’(B e on, 1998, p. 181).
These a gumen s abou democ acy and libe y a e mos ly no ma-
i e. On posi i e g ounds, he ques ion is whe he decen alisa ion is
impo an and how i makes a di e ence. Do mo e decen alised
coun ies ha e be e quali y o go e nmen ? Mo eo e , do all ins i u-
ional designs o decen alisa ion ( ypes) ha e he same e ec ?
Acco ding o he classical heo y, decen alisa ion imp o es he abili y
o go e nmen s o ully espond o he collec i e p e e ences. A di -
e en pe spec i e poin s o some disad an ages ela ed o p oblems
o coo dina ion and ine ia. In sum, he ela ionship be ween decen-
alisa ion and quali y o go e nmen is heo e ically ambi alen and
emains empi ically mixed.
This pape p o ides a wo ldwide empi ical analysis ha es s
hese wo con as ing iews. In pa icula , i add esses he speci ic
impac o poli ical, iscal and adminis a i e decen alisa ion and he
ole played by democ a ic ins i u ions. The esul s show ha
(a) decen alisa ion has indeed an independen and posi i e e ec on
he quali y o go e nmen , bu ha (b) he h ee ypes o decen alisa-
ion ha e subs an i ely di e en e ec s and ha (iii) he e ec o
decen alisa ion is a enua ed when he e ec o democ acy is consid-
e ed. Toge he , hese esul s shed ligh wi h ega d o he op imal
design o e o ms owa ds decen alisa ion ac oss he wo ld.
The nex sec ion p esen s a b ie pic u e o he gene al li e a u e
on he cos s and bene i s o decen alisa ion, including he huge
amoun o empi ical esul s. The hi d sec ion ocuses solely on he
This s udy was conduc ed a Resea ch Cen e in Poli ical Science (UID/CPO/0758/2019),
Uni e si y o Minho and suppo ed by he Po uguese Founda ion o Science and
Technology and he Po uguese Minis y o Educa ion and Science h ough na ional unds.
Recei ed: 5 June 2020 Accep ed: 20 Augus 2020
DOI: 10.1002/pa.2435
J Public A ai s. 2022;22:e2435. wileyonlinelib a y.com/jou nal/pa © 2020 John Wiley & Sons L d 1o 12
h ps://doi.o g/10.1002/pa.2435
14791854, 2022, 3, Downloaded om h ps://onlinelib a y.wiley.com/doi/10.1002/pa.2435 by Coch ane Po ugal, Wiley Online Lib a y on [22/03/2023]. See he Te ms and Condi ions (h ps://onlinelib a y.wiley.com/ e ms-and-condi ions) on Wiley Online Lib a y o ules o use; OA a icles a e go e ned by he applicable C ea i e Commons License
link o decen alisa ion and quali y o go e nmen pe o mance and
e iews he mos impo an empi ical a gumen s as well as de i es
h ee main hypo hesis. Sec ion ou p esen s he da a and me hods,
and sec ion i e discusses he indings.
2|THEBENEFITSANDCOSTSOF
DECENTRALISATION
The ad an age o small go e nmen s o small e i o ies is seen as he
app op ia e a angemen s o p o ec agains y anny o he majo i y,
p omo e poli ical pa icipa ion, accommoda e di e en and o en con-
lic ing iews and o espond o ci izens’demands (Inman &
Rubin eld, 1997). In e y simple e ms, he mos impo an heo e ical
a gumen conce ning decen alisa ion is ha i can make go e nmen
mo e accoun able and esponsi e o he go e ned (Fague , 2014).
The a gumen s conce ning p oximi y a e la e de eloped in
explici economic e ms by Tiebou (1956). He o mula ed he ad an-
ages o decen alisa ion and o he i ues o smalle uni s o go e n-
men because hey we e mo e capable o p omo ing a close ma ch
be ween as es and p e e ences o he ci izens o a locali y and a local
go e nmen ha is able o adjus he policies o hose p e e ences.
The di e ences o policies among local go e nmen s p omo e ho i-
zon al compe i ion among local go e nmen s. Bu o he ma ch o
occu , a necessa y condi ion has o be me : geog aphic mobili y o ci -
izens o sea ch o he mos p e e ed policy mix. In Tiebou 's wo ds,
ci izens “ o e wi h hei ee ”. Acco ding o he model, e iciency o
public p o ision is achie ed.
A new “second-gene a ion heo y o iscal ede alism”eme ged
o p o ide new insigh s in o he s uc u e and wo king o dec-
en alised uni a y and ede al sys ems (Oa es, 2005), pa icula ly he
implica ions o incen i es c ea ed by poli ical and iscal ins i u ions
(Weingas , 2014). This di e en pe spec i e poin s ou some impo -
an ca ea s ha ul ima ely make he ne e ec o decen alisa ion on
ou pu as inde e mina e (T eisman, 2006). The main disad an ages o
decen alisa ion a e ela ed o p oblems o coo dina ion and ine ia.
Fo example, T eisman (1999) o malises a game heo y model in
which decen alised coun ies, pa icula ly in he g oup o less de el-
oped, may ha e mo e di icul y in abandoning icious cycles o ine i-
ciency. T eisman's a gumen is ha ‘decen aliza ion may complica e
a emp s a mac oeconomic s abilisa ion and economic e o ms’.In
he end, he ne e ec o hese bene i s and cos on ou pu (economic
pe o mance and go e nance) is inde e mina e. In consequence, he
empi ical analysis o he e ec o decen alisa ion also p oduce e y
mixed esul s.
2.1 |Empi ical esul s
The i s s and o empi ical s udies ocused on he e ec s o iscal
decen alisa ion. This line o esea ch was p oduced by economis s
s essing he ole o sel -in e es ed and o e spending poli icians and
became known as he “sea ching o Le ia han”li e a u e. The idea o
a Le ia han ha o e spends pe manen ly was inspi ed in B ennan and
Buchanan (1980). Ma low (1988) analysed ime se ies da a
(1946–1985) o he USA and ound ha iscal decen alisa ion is
associa ed wi h slowing o alling public sec o size. In a panel analysis
o 18 OECD (1980–2000), Baska an (2011) ound ha decen alisa-
ion leads o an inc ease in he size o go e nmen . This esul s we e
i espec i e o he ideology o he cen al go e nmen , wi h no sup-
po o his ini ial hypo hesis ha he e ec o iscal decen alisa ion
on public sec o size depends on go e nmen 's ideology; howe e , he
magni ude o he ma ginal e ec is la ge unde a le - han unde a
igh -wing go e nmen .
Some analysis p esen an unequi ocally posi i e indings.
Lessmann (2009), bo h wi h c oss sec ion and panel da a o OECD
coun ies (1982–2000), inds ha highe a deg ee o iscal decen ali-
sa ion is associa ed wi h lowe egional dispa i ies. Hence, poo
egions expe ience no disad an ages om decen alisa ion and,
ins ead, appea o bene i . Lig ha and Van Oudheusden (2015) look
a whe he iscal decen alisa ion is associa ed wi h ci izens’ us in
go e nmen and ela ed ins i u ions, wi h he a gumen ha mo e
decen alised iscal sys ems imp o e pe cei ed go e nmen s’ espon-
si eness o ci izens’p e e ences. Thei su ey da a om up o
42 coun ies o e he pe iod 1994–2007 con i m his posi i e ela-
ionship, al hough his posi i e associa ion wi h iscal decen alisa ion
does no ex end o o he , non-go e nmen - ela ed ins i u ions.
Baska an, Feld, and Schnellenbach (2016) sugges ed ha decen alisa-
ion may also inc ease g ow h by aising he abili y o he poli ical sys-
em o inno a e and ca y ou e o ms.
Howe e , when poli ical decen alisa ion is conside ed, he
esul s appea mo e nega i e o , a leas , mixed. The esul s in Rodden
and Wibbels (2002), compa ing 46 ede al and uni a y de eloping
coun ies in he 197,995 pe iod, sugges ha poo pe o mance is
mo e likely in ede al coun ies. His a gumen is ha “de ol ed poli i-
cal and iscal ins i u ions c ea e incen i es o sub-na ional go e n-
men s o a oid o delay he poli ical cos s o iscal adjus men .”This
a gumen o a oidance o delay was con i med by T eisman (2000)
ha ound no di ec e ec on in la ion, bu ha poli ical decen alisa-
ion makes i mo e di icul o change he pa e ns o e olu ion o
in la ion o iscal policy because i c ea es mo e e o playe s leading
o “lock-in”e ec . Those decen alised coun ies ha s a wi h low
in la ion a es, in la ion inc eases slowly; he decen alised coun ies
ha s a wi h highe le els o in la ion end o emain wi h highe
le els and o expe ience mo e di icul y in educing i . A di e en iew
is p esen ed in Blancha d and Shlei e (2001), which a ibu e success
o China, as opposed o Russia o he p esence o poli ical
decen alisa ion.
3|DECENTRALISATION AND QUALITY OF
GOVERNMENT
The ela ionship be ween decen alisa ion o go e nmen ac i i ies
and hei pe o mance o quali y is an impo an elemen in he ecen
deba e on ins i u ional design. The i s empi ical pape o add ess
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empi ically he b oad concep o quali y o go e nmen was La Po a,
Lopez-de Silanes, Shlei e , and Vishny (1999) conside ing a la ge num-
be o measu es o go e nmen in e en ion, public sec o e iciency,
public good p o ision, size o go e nmen and poli ical eedom and
s udied a la ge c oss sec ion o coun ies. Thei econome ic analysis
sugges s ha coun ies ha a e poo , close o he equa o , e hno-
linguis ically he e ogeneous, use F ench o socialis laws o ha e high
p opo ions o Ca holics o Muslims exhibi in e io go e nmen pe -
o mance. Addi ionally, la ge go e nmen s end o pe o ming be e .
A well-de ined body o empi ical li e a u e in oduces speci ically
decen alisa ion as key independen a iable. As e iew in he p e i-
ous sec ion, he esul s also globally mixed. The i s s udy es ed he
ela ionship be ween i e measu es o (poli ical and iscal) decen ali-
sa ion and he le el o co up ion and he p o ision o public se ices
as hei measu es o he quali y o go e nmen (T eisman, 2002). The
indings, using a la ge sample o 67–88 coun ies, showed a weak
ela ionship be ween decen alisa ion and co up ion and low social
se ice p o ision.
In his decade, And eas Ky iacou, O iol Roca-Sagalés, and hei
colleagues published a se ies o h ee pape s analysing his ela ion.
The i s joins a c oss-sec ional and panel analysis o ind ha iscal
decen alisa ion imp o es go e nmen quali y bu anes when i is
accompanied by poli ical decen alisa ion Ky iacou and Roca-
Sagalés (2011a). La e , hey ound ha his posi i e e ec is mi iga ed
in he p esence o egional elec ions and mul ile el go e nmen
(Ky iacou & Roca-Sagalés, 2011b). In hei las piece, hey sugges ed
ha a p ocess o iscal decen alisa ion, accompanied by measu es o
imp o e he quali y o go e nmen , would be an e ec i e s a egy o
educing egional inequali ies (Ky iacou, Muinelo-Gallo, & Roca-
Sagalés, 2017).
Unde his b oad and e y o en imp ecise heme o quali y o
go e nmen (Ro hs ein & Teo ell, 2008), he concep and measu es o
co up ion a e p obably he mos empi ically s udied dimension.
Fisman and Ga i (2002), wi h a ela i ely small sample o 28–55
coun ies, ound ha iscal decen alisa ion o go e nmen expendi-
u e is s ongly and signi ican ly associa ed wi h lowe co up ion.
These esul s pe sis when decen alisa ion is ins umen ed by he o i-
gin o a coun y's legal sys em. Fan, Lin, and T eisman (2009) s udied
how poli ical decen alisa ion can a ec he equency and cos liness
o b ibe ex ac ion on he pa o co up o icials and ound ha
coun ies wi h a la ge numbe o go e nmen o adminis a i e ie s
and a la ge numbe o local public employees, epo ed b ibe y was
mo e equen . When local o cen al go e nmen s ecei ed a la ge
sha e o GDP in e enue, b ibe y was less equen . O e all, hey
in e p e ed hese esul s as sugges ing he dange o uncoo dina ed
en -seeking as go e nmen s uc u es become mo e complex.
3.1 |Which ype o decen alisa ion?
I is clea ha in his signi ican and ich empi ical li e a u e, he consen-
sus is s ill o be achie ed, la gely because a signi ican numbe o ques-
ions emain open. Ne e heless, some ele an poin s can be b ough
o he su ace. Abo e all, he e is a di e ence be ween iscal and poli i-
cal decen alisa ion which is exp essed in he di e en e ec s in quali y
o go e nmen shown in empi ical li e a u e. This is no su p ise because
hese a e no al e na i e measu es o he same concep as some
w ongly li e a u e s ill assumes. Ra he , hese a e wo di e en ins i u-
ional mechanisms ha ha e di e en heo e ical and empi ical implica-
ions. Fo example, O'Dwye and Zibla (2006) ound ha he di e en
ypes o decen alisa ion ha e di e ing and some imes opposing
impac s on he quali y o go e nance. Speci ically, poli ical decen alisa-
ion is associa ed wi h highe go e nmen e iciency among high GDP
pe capi a coun ies, while i is associa ed wi h lowe go e nmen e i-
ciency among low GDP pe capi a coun ies.
Mo eo e , he li e a u e, by ocusing almos exclusi ely on he
poli ical and iscal ypes, igno es he concep o adminis a i e decen-
alisa ion, ha is, he dis ibu ion o adminis a i e s uc u es and
employe s and/o unc ions (Lessmann & Ma kwa d , 2016). As o
long has been acknowledged, his is a di e en ins i u ional mecha-
nism ha is expec ed o ha e s ill di e en implica ions o he quali y
o go e nmen (Kau man, 1969). Figu e 1shows he sca e s o he
ela ion be ween he h ee di e en ypes o decen alisa ion— iscal,
adminis a i e and poli ical—and quali y o go e nmen . The posi i e
bi- a ia e ela ionships a e common, in acco dance wi h he gene al
expec a ion o he li e a u e, bu he he pa e ns a e no en i ely
coinciden . The e o e he i s wo hypo heses a e:
H1 :Decen aliza ion has an independen and posi i e e ec on he
quali y o go e nmen ;
H2 :Poli ical, iscal and adminis a i e ypes o decen aliza ion ha e
di e en e ec s on he quali y o go e nmen .
3.2 |The ole o democ acy and accoun abili y?
The speci ic ole played o speci ic poli ical and social ins i u ions also
canno be neglec ed ei he . Ka ls öm (2015) no es ha he po en ial
o decen alisa ion o cu b co up ion is dependen on he p esence
o ins i u ions ha gi e ci izens in o ma ion on go e nmen beha iou
and he capaci y o ac upon he gi en in o ma ion. In he same ash-
ion (Lessmann and Ma kwa d (2010)) p esen s empi ical esul s
sugges ing ha he bene i s o decen alisa ion only occu i he e is a
supe iso y body such as a ee p ess, which is o en lacking in a sub-
s an ial numbe o coun ies. His policy implica ion is ha a ee p ess
is a necessa y p e-condi ion o success ul decen alisa ion
p og ammes.
Democ acy plays a de e minan ole in his link be ween decen-
alisa ion and go e nance because i is he mos impo an ins i u-
ional se ing o ha e ci izens in o med abou go e nmen beha iou .
Again, he empi ical esul s on ole o democ acy emain unce ain.
Fo one hand, O'Dwye and Zibla (2006) ound ha he e ec s o
decen alisa ion a e minimal when con olling o basic s uc u al a i-
ables such as he deg ee o democ acy and pe capi a GDP. Fo he
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o he , he e ec o democ acy is howe e no ound in Ky iacou and
Roca-Sagalés (2011a) s udy. Thei main conclusion, ha iscal decen-
alisa ion has no e ec on go e nmen quali y when accompanied by
poli ical decen alisa ion, does no change e en when con olling o
he deg ee o democ a ic ma u i y ac oss coun ies.
Figu e 2depic s wo di e en pa e ns in he ela ionship obse ed
in Figu e 1depending on which g oup we look a : democ a ic and non-
democ a ic coun ies. The e o e, in line wi h Ka ls öm (2015), he second
hypo hesis conside s how he le el o democ acy mode a es he ela ion-
ship be ween decen alisa ion and he quali y o go e nmen . Las ly, he
ollowing hi d hypo hesis conce ning he oleo democ acyis:
H3 :The e ec o decen aliza ion is a enua ed when he e ec o
democ acy is conside ed.
4|EMPIRICAL STRATEGY
In acco dance wi h he hypo heses p esen ed in he p e ious sec ion,
he main objec i e o his pape is o empi ically es (a) he
independen e ec o decen alisa ion on he quali y o go e nmen ;
(b) o dis inguish he di e ences among he ypes o decen alisa ion
and (c) add ess he ole played by democ acy in he ela ionship. A
wo ldwide analysis is equi ed, and he ollowing s ylised model is
es ed.
QoGi=αDeci+βDemi+γXi+ϵ,
whe e QoG is he quali y o go e nmen , Dec is he decen alisa ion
(poli ical, iscal and adminis a i e), Dem is he index o democ acy,
and Xis a se o con ol a iables.
Following he poin made in Adam, Delis, and Kammas (2014)
ha he e ec o decen alisa ion on go e nance is no linea bu
de e mined by an in e ed U-shaped ela ionship, decen alisa ion is
included in he eg essions as a second-deg ee polynomial
Deci=Di+D2
i:
Mos o he da a used in he analysis comes om he QoG S an-
da d da a se o he Quali y o Go e nmen Ins i u e (Uni e si y o
Go hembu g), which assembles an imp essi e numbe o a iables
om many di e en sou ces (Teo ell e al., 2019). The excep ion was
a iables aken di ec ly om I anyna and Shah (2012) who p oduced
0 .2 .4 .6 .8 1
Quali y o Go e nmen
0 .2 .4 .6 .8 1
Poli ical Decen aliza ion Index
0 .2 .4 .6 .8 1
Quali y o Go e nmen
0 .2 .4 .6 .8 1
Fiscal Decen aliza ion Index
0 .2 .4 .6 .8 1
Quali y o Go e nmen
0 .2 .4 .6 .8 1
Adminis a i e Decen aliza ion Index
(a)
(c)
(b)
FIGURE 1 A–C, Poli ical, iscal, and adminis a i e decen alisa ion and quali y o go e nmen
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Albania
A gen ina
Aus alia
Aus ia
Bahamas
Bangladesh
Belgium
Boli ia
Bo swana
B azilBulga ia
Canada
Chile
Colombia
Cos a Rica
C oa ia
Cyp us
Czech Republic
Denma k
Dominican Republic
Ecuado
El Sal ado
Es onia
Finland
F ance
Ge many
Ghana
G eece
Gua emala Guyana
Hondu as
Hunga y
Iceland
India
Indonesia
I eland
Is ael
I aly
Jamaica
Japan
Kenya
Ko ea, Rep.
La ia
Libe ia
Li huania
Luxembou g
Malawi
Mali
Mal a
Mexico
Mongolia
Ne he lands New Zealand
Nica agua
No way
Pakis an
Panama Papua New Guinea
Pa aguay
Pe u
Philippines
Poland
Po ugal
RomaniaSenegal
Se bia
Sie a Leone
Slo enia
Sou h A ica
Spain
Su iname
Sweden
Swi ze land
Taiwan
T inidad and Tobago
Tu key
Uk aine
Uni ed Kingdom
Uni ed S a es
U uguay
ZambiaAlge ia
Angola A menia Aze baijan
Bah ain
Bela us Bu kina Faso
Came oon
China Cuba
Egyp
E hiopia
Gabon
Gambia
Guinea
Guinea−Bissau
Hai i
I aq
Jo dan
Kazakhs an
Kuwai
Lebanon
Madagasca
Malaysia
Mo occo
Mozambique
Namibia
Nige
Nige ia
Oman Qa a
Saudi A abia
Singapo e
Somalia
S i Lanka Thailand
Togo
Tunisia
Uganda
Uni ed A ab Emi a es
Venezuela
Yemen
Zimbabwe
0 .2 .4 .6 .8 1
Quali y o Go e nmen
0 .2 .4 .6 .8 1
Poli ical Decen aliza ion Index
Albania
A gen ina
Aus alia
Aus ia
Bahamas
Bangladesh
Belgium
Boli ia
Bo swana
B azilBulga ia
Canada
Chile
Colombia
Cos a Rica
C oa ia
Cyp us
Czech Republic
Denma k
Dominican Republic
Ecuado
El Sal ado
Es onia
Finland
F ance
Ge many
Ghana
G eece
Gua emala
Guyana
Hondu as
Hunga y
Iceland
India
Indonesia
I eland
Is ael
I aly
Jamaica
Japan
Kenya
Ko ea, Rep.
La ia
Libe ia
Li huania
Luxembou g
Malawi
Mali
Mal a
Mexico
Mongolia
Ne he lands New Zealand
Nica agua
No way
Pakis an
Panama
Papua New Guinea
Pa aguay
Pe u
Philippines
Poland
Po ugal
RomaniaSenegal
Se bia
Sie a Leone
Slo enia
Sou h A ica
Spain
Su iname
Sweden
Swi ze land
Taiwan
T inidad and Tobago Tu key
Uk aine
Uni ed Kingdom
Uni ed S a es
U uguay
ZambiaAlge ia
Angola A menia
Aze baijan
Bah ain
Bela usBu kina Faso
Came oon
ChinaCuba
Egyp
E hiopia
Gabon
Gambia
Guinea
Guinea−Bissau
Hai i
I aq
Jo dan
Kazakhs an
Kuwai
Lebanon
Madagasca
Malaysia
Mo occo
Mozambique
Namibia
Nige
Nige ia
OmanQa a
Saudi A abia
Singapo e
Somalia
S i Lanka Thailand
Togo
Tunisia
Uganda
Uni ed A ab Emi a es
Venezuela
Yemen
Zimbabwe
0 .2 .4 .6 .8 1
Quali y o Go e nmen
0 .2 .4 .6 .8 1
Fiscal Decen aliza ion Index
Albania
A gen ina
Aus alia
Aus ia
Bahamas
Bangladesh
Belgium
Boli ia
Bo swana
B azilBulga ia
Canada
Chile
Colombia
Cos a Rica
C oa ia
Cyp us
Czech Republic
Denma k
Dominican Republic
Ecuado
El Sal ado
Es onia
Finland
F ance
Ge many
Ghana
G eece
Gua emala
Guyana
Hondu as
Hunga y
Iceland
India
Indonesia
I eland
Is ael
I aly
Jamaica
Japan
Kenya
Ko ea, Rep.
La ia
Libe ia
Li huania
Luxembou g
Malawi
Mali
Mal a
Mexico
Mongolia
Ne he lands New Zealand
Nica agua
No way
Pakis an
Panama
Papua New Guinea
Pa aguay
Pe u
Philippines
Poland
Po ugal
RomaniaSenegal
Se bia
Sie a Leone
Slo enia
Sou h A ica
Spain
Su iname
Sweden
Swi ze land
Taiwan
T inidad and Tobago Tu key
Uk aine
Uni ed Kingdom
Uni ed S a es
U uguay
ZambiaAlge ia
Angola A menia
Aze baijan
Bah ain
Bela usBu kina Faso
Came oon
ChinaCuba
Egyp
E hiopia
Gabon
Gambia
Guinea
Guinea−Bissau
Hai i
I aq
Jo dan
Kazakhs an
Kuwai
Lebanon
Madagasca
Malaysia
Mo occo
Mozambique
Namibia
Nige
Nige ia
OmanQa a
Saudi A abia
Singapo e
Somalia
S i Lanka Thailand
Togo
Tunisia
Uganda
Uni ed A ab Emi a es
Venezuela
Yemen
Zimbabwe
0 .2 .4 .6 .8 1
Quali y o Go e nmen
0 .2 .4 .6 .8 1
Fiscal Decen aliza ion Index
(a) (b)
(c)
FIGURE 2 Decen alisa ion and democ acy
TABLE 1 Summa y s a is ics Va iable Mean S d. De . Min. Max. N
Quali y o go e nmen 0.532 0.21 0.083 0.972 130
Go e nmen e ec i eness −0.043 0.993 −2.27 2.168 177
Con ol o co up ion −0.047 0.998 −1.609 2.41 177
Regula o y quali y −0.05 0.982 −2.518 1.965 177
Democ acy index 34.78 27.029 0 92.423 173
Poli ical decen alisa ion 0.488 0.235 0 1 154
Fiscal decen alisa ion 0.35 0.248 0.06 1 154
Adminis a i e decen alisa ion 0.32 0.28 0 0.9 154
GDP pe capi a, log 8.871 1.298 5.806 11.594 177
Go e nmen expendi u e (% GDP) 33.553 11.349 13.966 73.252 164
Schooling yea s 8.227 3.131 1.241 13.424 132
Popula ion densi y, log 4.29 1.432 0.61 9.84 177
A ea, log 11.299 2.696 0.693 16.611 177
CAMÕES 5o 12
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TABLE 2 Decen alisa ion and quali y o go e nmen : c oss-sec ional esul s
Va iables Poli ical Decen alisa ion Fiscal Decen alisa ion Adminis a i e Decen alisa ion
Decen alisa ion 0.053*(0.031) 0.003 (0.025) 0.181*** (0.031) 0.067*** (0.024) 0.083** (0.038) 0.038 (0.024)
E ec i e democ acy index 0.006*** (0.001) 0.005*** (0.001) 0.005*** (0.001)
GDP pe capi a, log 0.079*** (0.024) 0.053*** (0.014) 0.060*** (0.018) 0.048*** (0.013) 0.084*** (0.025) 0.054*** (0.015)
Go e nmen expendi u e (pe cen o GDP) 0.005** (0.002) 0.002 (0.001) 0.007*** (0.002) 0.003** (0.001) 0.006*** (0.002) 0.003*(0.001)
A e age schooling yea s 0.008 (0.009) −0.005 (0.006) 0.004 (0.008) −0.006 (0.006) 0.005 (0.009) −0.007 (0.007)
Popula ion densi y, log 0.008 (0.015) 0.001 (0.010) −0.003 (0.012) −0.004 (0.008) 0.011 (0.015) 0.000 (0.009)
A ea, log −0.006 (0.009) 0.000 (0.006) −0.018** (0.009) −0.006 (0.006) −0.010 (0.011) −0.003 (0.006)
Colonial o igin = Du ch 0.078*(0.041) 0.011 (0.031) 0.085** (0.037) 0.022 (0.032) 0.105** (0.043) 0.023 (0.032)
Colonial o igin = Spanish −0.022 (0.074) 0.022 (0.051) 0.014 (0.057) 0.028 (0.047) −0.016 (0.073) 0.022 (0.049)
Colonial o igin = US 0.060 (0.049) 0.052 (0.032) 0.083** (0.041) 0.056*(0.031) 0.066 (0.056) 0.043 (0.035)
Colonial o igin = B i ish −0.002 (0.045) 0.045 (0.036) 0.021 (0.044) 0.048 (0.036) −0.004 (0.049) 0.045 (0.037)
Colonial o igin = F ench −0.044 (0.054) 0.019 (0.049) −0.030 (0.049) 0.016 (0.048) −0.045 (0.054) 0.018 (0.048)
Colonial o igin = Po uguese −0.044 (0.097) −0.050 (0.058) −0.122 (0.083) −0.078 (0.058) −0.062 (0.100) −0.058 (0.063)
Colonial o igin = Aus alian −0.161*** (0.058) 0.038 (0.050) −0.038 (0.053) 0.055 (0.047) −0.122** (0.058) 0.047 (0.046)
REGION = Oceania 0.197** (0.075) 0.026 (0.051) 0.109*(0.064) 0.016 (0.049) 0.182** (0.079) 0.023 (0.050)
REGION = Ame ica −0.072 (0.059) −0.065 (0.042) −0.079 (0.054) −0.069*(0.042) −0.074 (0.064) −0.068 (0.042)
REGION = Asia −0.035 (0.063) 0.059 (0.043) −0.022 (0.054) 0.055 (0.042) −0.061 (0.063) 0.050 (0.042)
REGION = Eu opa −0.039 (0.075) −0.046 (0.044) −0.074 (0.067) −0.056 (0.044) −0.103 (0.087) −0.071 (0.050)
Cons an −0.367*(0.207) −0.186 (0.140) −0.094 (0.209) −0.089 (0.139) −0.364 (0.249) −0.160 (0.146)
Obse a ions 102 100 100 100 100 100
R
2
0.716 0.885 0.797 0.895 0.728 0.890
No e: Robus s anda d e o s in pa en heses.
*p< .1.
**p< .05.
***p< .01.
6o 12 CAMÕES
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TABLE 3 Decen alisa ion and quali y o go e nmen : al e na i e measu es
Va iables Go e nmen E ec i eness Con ol o Co up ion Regula o y Quali y
Poli ical decen alisa ion −0.030 (0.083) −0.117 (0.096) −0.061 (0.099)
Fiscal decen alisa ion 0.271***
(0.102)
0.417***
(0.141)
0.191 (0.115)
Adminis a i e decen alisa ion 0.204***
(0.076)
0.272** (0.105) 0.179**
(0.087)
E ec i e democ acy index 0.024***
(0.002)
0.022***
(0.002)
0.023***
(0.002)
0.032***
(0.002)
0.028***
(0.003)
0.031***
(0.002)
0.023***
(0.003)
0.020***
(0.003)
0.022***
(0.003)
GDP pe capi a, log 0.293***
(0.078)
0.278***
(0.075)
0.298***
(0.081)
0.276***
(0.082)
0.249***
(0.077)
0.279***
(0.086)
0.206** (0.081) 0.194** (0.080) 0.209**
(0.083)
Go e nmen expendi u e (% o
GDP)
−0.002 (0.004) −0.000 (0.004) −0.001 (0.004) 0.001 (0.006) 0.004 (0.005) 0.003 (0.006) −0.016***
(0.006)
−0.014***
(0.005)
−0.014**
(0.005)
A e age schooling yea s 0.011 (0.026) 0.008 (0.024) −0.000 (0.026) −0.043 (0.027) −0.050**
(0.025)
−0.060**
(0.028)
0.012 (0.028) 0.008 (0.027) 0.001 (0.028)
Popula ion densi y, log 0.019 (0.038) −0.002 (0.035) 0.010 (0.035) −0.067 (0.040) −0.105***
(0.039)
−0.085**
(0.037)
0.034 (0.038) 0.016 (0.038) 0.023 (0.037)
A ea, log −0.011 (0.023) −0.039 (0.024) −0.032 (0.020) −0.059**
(0.026)
−0.108***
(0.027)
−0.094***
(0.025)
−0.019 (0.027) −0.042 (0.028) −0.041
(0.027)
Colonial o igin = Du ch −0.213*
(0.110)
−0.180*
(0.106)
−0.163 (0.101) −0.377***
(0.129)
−0.319**
(0.129)
−0.303**
(0.124)
−0.360**
(0.141)
−0.333**
(0.142)
−0.313**
(0.144)
Colonial o igin = Spanish 0.125 (0.196) 0.119 (0.185) 0.113 (0.194) 0.176 (0.214) 0.160 (0.195) 0.152 (0.211) 0.149 (0.251) 0.141 (0.241) 0.135 (0.247)
Colonial o igin = US 0.164 (0.117) 0.144 (0.114) 0.073 (0.111) 0.018 (0.139) −0.044 (0.131) −0.138 (0.144) −0.200 (0.153) −0.232 (0.144) −0.295**
(0.138)
Colonial o igin = B i ish 0.094 (0.145) 0.112 (0.139) 0.090 (0.139) 0.110 (0.169) 0.146 (0.164) 0.113 (0.169) −0.110 (0.153) −0.092 (0.153) −0.110
(0.149)
Colonial o igin = F ench 0.090 (0.172) 0.092 (0.164) 0.085 (0.163) 0.156 (0.191) 0.162 (0.187) 0.153 (0.192) −0.046 (0.196) −0.043 (0.192) −0.048
(0.187)
Colonial o igin = Po uguese 0.172 (0.231) 0.062 (0.243) 0.127 (0.267) 0.153 (0.206) −0.015 (0.187) 0.093 (0.214) 0.267 (0.193) 0.191 (0.184) 0.228 (0.198)
Colonial o igin = Belgian 0.697*(0.363) 0.677*(0.376) 0.658*(0.364) 0.911 (0.754) 0.875 (0.775) 0.852 (0.755) 0.385 (0.288) 0.368 (0.290) 0.348 (0.281)
Colonial o igin = Aus alian 0.353** (0.175) 0.409** (0.165) 0.368** (0.161) −0.428*
(0.223)
−0.350*
(0.206)
−0.418*
(0.210)
−0.078 (0.201) −0.043 (0.205) −0.069
(0.198)
REGION = Oceania −0.191 (0.167) −0.219 (0.155) −0.191 (0.151) 0.206 (0.198) 0.158 (0.180) 0.201 (0.187) 0.153 (0.207) 0.130 (0.205) 0.150 (0.200)
REGION = Ame ica −0.195 (0.150) −0.187 (0.143) −0.211 (0.145) −0.221 (0.152) −0.215 (0.134) −0.249*
(0.144)
−0.220 (0.183) −0.218 (0.170) −0.236
(0.176)
REGION = Asia 0.216 (0.168) 0.210 (0.160) 0.185 (0.165) 0.346*(0.185) 0.344** (0.172) 0.312*(0.181) 0.092 (0.206) 0.092 (0.204) 0.068 (0.202)
REGION = Eu opa −0.150 (0.163) −0.176 (0.157) −0.279*
(0.161)
−0.230 (0.198) −0.271 (0.181) −0.404*
(0.206)
0.124 (0.200) 0.104 (0.198) 0.009 (0.202)
(Con inues)
CAMÕES 7o 12
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da a on he h ee di e en ypes o decen alisa ion, bu only as
c oss-sec ional measu es.
4.1 |Dependen a iable: QOG
The quali y o go e nmen is complex and mul idimensional concep .
La Po a e al. (1999) use he e m “good”in hei a icle o s and o
good- o -economic de elopmen , ha is, good go e nmen pe o -
mance. They use measu es as di e se as go e nmen in e en ion,
public sec o e iciency, public good p o ision, size o go e nmen and
poli ical eedom in hei analysis. The Quali y o Go e nmen Ins i-
u e de eloped a speci ic de ini ion o QoG along he concep o he
impa iali y o ins i u ions ha exe cise go e nmen au ho i y
Ro hs ein and Teo ell (2008). Acco dingly, in Cha on and
Lapuen e (2013), quali y o go e nmen is unde s ood as: (a) con ol
o co up ion; (b) impa ial ea men o ci izens and (c) go e nmen
e ec i eness. This way, he p ima y dependen a iable o he qual-
i y o go e nmen is a composi e measu e by he In e na ional Coun-
y Risk Guide which includes h ee componen s: ‘Co up ion’,‘Law
and O de ’, and ‘Bu eauc acy Quali y’scaled 0–1. Fo obus ness pu -
poses, I also es h ee a iables included in he da ase o he Wo ld
Go e nance Indica o s eleased by he Wo ld Bank: (a) go e nmen
e ec i eness; (b) con ol o co up ion and (c) egula o y quali y.
4.2 |Key independen a iables: decen alisa ion
and democ acy
Wi h ega d o decen alisa ion, we al eady a gued o he h ee di -
e en ypes o decen alisa ion ha expec ed o p oduce somewha
di e en e ec s (Mano , 1999). I use he h ee a iables de eloped by
I anyna and Shah (2012), he only au ho s ha collec ed hese ypes
o da a.
4.2.1 |Poli ical decen alisa ion
Poli ical decen alisa ion is he ans e o powe o lowe le els o
au ho i y ha a e la gely democ a ic and independen o he highe
le els. I is he case when cen al go e nmen is gi ing up e ec i e
au ho i y (Mano , 1999). Fo example, he c ea ion o a new le el o
egional o local go e nmen ha is democ a ically elec ed cons i u es
a case o poli ical decen alisa ion. In he same way, when an al eady
exis ing le el o sub-na ional go e nmen has go e nance bodies ha
we e p e iously appoin ed by cen al go e nmen bu a e la e demo-
c a ically elec ed, he e is an inc ease in poli ical decen alisa ion. The
key aspec o poli ical decen alisa ion is he inc easing in luence o
powe o o ganised in e es s a lowe le els. Fo his eason, some
au ho s claim his ype o decen alisa ion o be he only genuine ype
o decen alisa ion. Al hough commonly used in analyses, he ede al
s a us is a e y poo measu e o poli ical decen alisa ion because ed-
e alism is a ca ego y o sys ems a he han a single sys em o
TABLE 3 (Con inued)
Va iables Go e nmen E ec i eness Con ol o Co up ion Regula o y Quali y
Cons an −3.363***
(0.610)
−2.911***
(0.610)
−3.120***
(0.574)
−2.263***
(0.577)
−1.485**
(0.609)
−1.849***
(0.599)
−1.933***
(0.681)
−1.568**
(0.692)
−1.680**
(0.665)
Obse a ions 113 113 113 113 113 113 113 113 113
R
2
0.901 0.908 0.906 0.876 0.889 0.883 0.847 0.850 0.851
No e: Robus s anda d e o s in pa en heses.
*p< .1.
**p< .05.
***p< .01.
8o 12 CAMÕES
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TABLE 4 Decen alisa ion and quali y o go e nmen : spa ial analysis
Va iables Poli ical Decen alisa ion Fiscal Decen alisa ion Adminis a i e Decen alisa ion
Decen alisa ion 0.062** (0.031) 0.009 (0.021) 0.187*** (0.026) 0.077*** (0.022) 0.082*** (0.029) 0.038** (0.019)
E ec i e democ acy index 0.006*** (0.000) 0.005*** (0.001) 0.005*** (0.000)
GDP pe capi a, log 0.076*** (0.016) 0.052*** (0.011) 0.057*** (0.014) 0.047*** (0.010) 0.083*** (0.016) 0.054*** (0.010)
Go e nmen expendi u e (% o GDP) 0.006*** (0.002) 0.003** (0.001) 0.008*** (0.001) 0.004*** (0.001) 0.007*** (0.002) 0.003*** (0.001)
A e age schooling yea s 0.007 (0.008) −0.005 (0.005) 0.002 (0.007) −0.006 (0.005) 0.004 (0.008) −0.007 (0.005)
Popula ion densi y, log 0.013 (0.012) 0.003 (0.008) 0.003 (0.010) −0.000 (0.008) 0.016 (0.012) 0.003 (0.008)
A ea, log 0.000 (0.008) 0.002 (0.005) −0.011 (0.007) −0.003 (0.005) −0.005 (0.008) −0.001 (0.006)
Colonial o igin = Du ch 0.100 (0.117) 0.022 (0.075) 0.111 (0.098) 0.039 (0.071) 0.124 (0.115) 0.034 (0.074)
Colonial o igin = Spanish 0.001 (0.066) 0.031 (0.042) 0.041 (0.055) 0.043 (0.040) 0.004 (0.065) 0.031 (0.042)
Colonial o igin = I alian 0.000 (0.000) 0.000 (0.000) 0.000 (0.000) 0.000 (0.000) 0.000 (0.000) 0.000 (0.000)
Colonial o igin = US 0.040 (0.119) 0.043 (0.076) 0.067 (0.097) 0.049 (0.071) 0.054 (0.115) 0.038 (0.073)
Colonial o igin = B i ish 0.003 (0.044) 0.046 (0.029) 0.027 (0.037) 0.050*(0.027) −0.001 (0.043) 0.046 (0.028)
Colonial o igin = F ench −0.041 (0.063) 0.019 (0.040) −0.026 (0.052) 0.015 (0.038) −0.042 (0.061) 0.018 (0.040)
Colonial o igin = Po uguese −0.034 (0.095) −0.045 (0.060) −0.114 (0.079) −0.076 (0.058) −0.055 (0.093) −0.054 (0.059)
Colonial o igin = Belgian 0.000 (0.000) 0.000 (0.000) 0.000 (0.000) 0.000 (0.000) 0.000 (0.000) 0.000 (0.000)
Colonial o igin = B i ish-F ench 0.000 (0.000) 0.000 (0.000) 0.000 (0.000) 0.000 (0.000) 0.000 (0.000) 0.000 (0.000)
Colonial o igin = Aus alian −0.144 (0.143) 0.041 (0.092) −0.013 (0.120) 0.063 (0.088) −0.107 (0.141) 0.051 (0.091)
REGION = Oceania 0.179*(0.096) 0.022 (0.063) 0.086 (0.081) 0.008 (0.059) 0.167*(0.095) 0.019 (0.061)
REGION = Ame ica −0.081 (0.057) −0.070*(0.036) −0.089*(0.047) −0.075** (0.034) −0.081 (0.056) −0.072** (0.036)
REGION = Asia −0.040 (0.049) 0.054*(0.032) −0.029 (0.040) 0.047 (0.031) −0.067 (0.048) 0.045 (0.032)
REGION = Eu opa −0.005 (0.066) −0.030 (0.042) −0.038 (0.055) −0.038 (0.040) −0.075 (0.068) −0.058 (0.043)
Cons an −0.440** (0.188) −0.223*(0.123) −0.178 (0.160) −0.133 (0.118) −0.436** (0.183) −0.200*(0.120)
CW (quali y o go e nmen ) −0.150** (0.066) −0.066 (0.042) −0.170*** (0.055) −0.090** (0.040) −0.125*(0.064) −0.061 (0.041)
Obse a ions 102 100 102 100 102 100
Obse a ions 100 100 100 100 100 100
No e: S anda d e o s in pa en heses.
*p< .1.
**p< .05.
***p< .01.
CAMÕES 9o 12
14791854, 2022, 3, Downloaded om h ps://onlinelib a y.wiley.com/doi/10.1002/pa.2435 by Coch ane Po ugal, Wiley Online Lib a y on [22/03/2023]. See he Te ms and Condi ions (h ps://onlinelib a y.wiley.com/ e ms-and-condi ions) on Wiley Online Lib a y o ules o use; OA a icles a e go e ned by he applicable C ea i e Commons License