Andrés Rodríguez-Pose, Dept of Geography and Environment
London School of Economics
, London, United Kingdom, Adala Bwire, Roger Tym and Partners, London, United Kingdom
Devolution, policy choice, and economic performance (assigned to theme
The recent drive towards devolution has been often based on the idea that greater proximity enables governments to be more responsive to citizens' needs and to match the allocation of public resources to match those needs. Yet the devolutionary process and citizens' preferences vary from one place to the other. This paper explores functional devolution in the US, Germany, India, Spain, Mexico, and Italy in order to see whether how subnational governments allocate expenditure has an influence on economic performance. We find that the allocation of subnational expenditure between capital and current expenditure is often associated with how regions have gained their functional responsibilities. In other words, whether the devoultuionary process is driven from the top or from the botton has an important influence on how resources are allocated and, ultimately, on the economic impact of devolution.
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