The Impact of Intergovernmental Transfers on Education Outcomes and Poverty Reduction

This paper provides regression discontinuity evidence on development impacts of intergovernmental transfers. Extra transfers in Brazil increased local government spending per capita by about 20 percent over a 4 year period with no evidence of crowding out own revenue or other revenue sources. School...

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Bibliographic Details
Published inAmerican economic journal. Applied economics Vol. 5; no. 4; pp. 206 - 240
Main Authors Litschig, Stephan, Morrison, Kevin M.
Format Journal Article
LanguageEnglish
Published American Economic Association 01.10.2013
Subjects
Censuses
Corruption
Developing countries
Economic impact
Economic models
Economic statistics
Economic theory
Economics
Education
Federal government
Funding
Government services
Government spending
Human capital
LDCs
Literacy
Local government
Municipalities
Per capita
Political economy
Political science
Politics
Population
Population estimates
Poverty
Pretreatment
Public services
Reelection
Seminars
Spending
Studies
Brazil
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Summary:This paper provides regression discontinuity evidence on development impacts of intergovernmental transfers. Extra transfers in Brazil increased local government spending per capita by about 20 percent over a 4 year period with no evidence of crowding out own revenue or other revenue sources. Schooling per capita increased by about 7 percent and literacy rates by about 4 percentage points. In line with the effect on human capital the poverty rate was reduced by about 4 percentage points. Somewhat noisier results also suggest that the reelection probability of local incumbent parties in the 1988 elections improved by about 10 percentage points.
ISSN:1945-7782
1945-7790
DOI:10.1257/app.5.4.206