DMCA
1 Do formula-based intergovernmental transfer mechanisms eliminate politically motivated targeting? Evidence from Ghana
BibTeX
@MISC{Banful_1do,
author = {Afua Branoah Banful},
title = {1 Do formula-based intergovernmental transfer mechanisms eliminate politically motivated targeting? Evidence from Ghana},
year = {}
}
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Abstract
Empirical evidence from across the world consistently confirms the pervasiveness of politically motivated targeting of intergovernmental transfers. Some countries have adopted formulaic sharing mechanisms as a strategy to limit political incentives in central resource allocation decisions. The prevailing presumption is that intergovernmental transfers determined by a formula comprising of economic and welfare indicators will obstruct political considerations that distort allocations resulting from processes based on discretion. In this paper, we investigate a formula-based system of allocating resources from a central government to local governments to determine whether the political characteristics of recipient areas have any bearing on their allocation. Specifically, we study the sharing of resources of the District Assemblies Common Fund (DACF) in Ghana amongst the country‟s district governments over the period 1994 to 2005. We find evidence that the mechanism does not eliminate politically motivated targeting of grants. Per capita DACF grants were higher in districts where vote margins in the previous presidential election were lower, suggesting that districts with more swing voters were targeted. We find evidence that DACF formula indicators and their weighting were chosen and amended
Keyphrases
formula-based intergovernmental transfer intergovernmental transfer motivated targeting political incentive central government prevailing presumption political consideration district assembly common fund dacf formula indicator central resource allocation decision empirical evidence formula-based system welfare indicator local government political characteristic recipient area district government vote margin per caput dacf grant formula comprising previous presidential election swing voter
