How Effective is Fiscal Decentralization for Inequality Reduction in Developing Countries?

Kumba Digdowiseiso , Mansoob Murshed, Sylvia Bergh

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)
34 Downloads (Pure)


The relationship between fiscal decentralization and vertical inequality has long received attention by fiscal federalism theorists. However, horizontal inequality has been largely overlooked. This study will present a novel empirical examination of the relationship between fiscal decentralization, vertical inequality, and horizontal inequality. Specifically, it will focus on how institutional
quality and military expenditure affect the fiscal decentralization–inequality nexus across 33 developing countries in the period 1990–2014. Findings indicate that varieties of fiscal authority have
a significant effect on distribution of income and ethnic inequality. This depends on the level of
institutions and defense spending achieved by these developing countries
Original languageEnglish
Article number505
Number of pages19
Issue number1
Publication statusPublished - 4 Jan 2022
Externally publishedYes

Bibliographical note

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited


  • fiscal decentralization
  • inequality
  • institutional quality
  • military spending


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