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Publius: The Journal of Federalism Advance Access originally published online on November 6, 2008
Publius: The Journal of Federalism 2009 39(4):632-650; doi:10.1093/publius/pjn034
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© The Author 2008. Published by Oxford University Press on behalf of CSF Associates: Publius, Inc. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org.

When is Fiscal Decentralization Good for Governance?

Charles R. Hankla*
*Georgia State University; chankla{at}gsu.edu

Many developing countries are seeking to improve governance with fiscal decentralization. It is therefore worth revisiting what we know about political and economic institutions to understand how and under what circumstances decentralization can be beneficial. In an effort to do that, I review past research on the governance implications of devolving power to subnational authorities. Based on this review, I find that the gains from decentralization depend sensitively on how subnational authorities and intergovernmental relations are structured. I therefore conclude the paper by drawing nine lessons from theory and experience to help improve the design of decentralized institutions.


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