The Journal of Development Studies · 2011 · 17 citations · 9 references
Public AffairsPublic FinancePublic PolicyFiscal PolicyIntergovernmental Fiscal RelationsPublic EconomicsFederal GrantsForeign AidGovernment Grant ApplicationsIntergovernmental GrantsIntergovernmental TransfersRegional RedistributionFair Resource AllocationGrant Funding FormulasIntergovernmental Education GrantsIntergovernmental Grant SystemsIntergovernmental Grants In EducationIntergovernmental Resource AllocationNational Parliament RepresentationPolitical Economy Of Grants
Abstract Sub-national governments usually depend on the central government for a large share of their revenues. Therefore, a fair allocation of intergovernmental grants is essential for financing vital local services like education and healthcare. In Tanzania, and many other countries, regions that are better represented in the national parliament receive significantly more funds than others. Recently, Tanzania replaced the previously existing discretionary method of grant allocation by allocation formulas. We study whether this has reduced the effect of malapportionment on grant allocation. Surprisingly, we find that formula allocation does not significantly change this effect. This has important policy implications.
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