Decentralization in Ethiopia--Who Benefits?

This paper shows that greater autonomy to cities in Ethiopia through a process of city proclamations, led to better economic outcomes at the city level, lowering regional spatial inequalities. In addition, the newly-empowered cities did not seem to misuse their new powers by favoring particular firms over others. We investigate the effect of a nation-wide introduction of VAT in Ethiopia – and show that the intended recipients of the reform, i.e. importing firms performed better (in terms of employment and sales) only after the VAT introduction in decentralized cities with greater autonomy than in non-decentralized cities. This is suggestive evidence that increasing administrative powers (or the mayor’s wedge) played an important role in making Ethiopian cities more competitive, and allowed mayor’s to transmit more efficiently the effect of national-level reforms.

Bibliographic Details

Main Authors:	Chaurey, Ritam, Mukim, Megha
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2015-12-01
Subjects:	TAX INCENTIVES, TARIFFS, SUB-NATIONAL, EQUITY, TRANSACTION, VALUE ADDED, CITY ADMINISTRATION, TAX RATE, URBANIZATION, WAGES, ECONOMIC OUTCOMES, CITY, PUBLIC ECONOMICS, BUSINESS COMMUNITY, ADMINISTRATIVE REGION, REGIONAL COUNCIL, FUTURE, INTEREST, VALUE, COMPETITIVENESS, REGIONAL LEVEL, BUDGETS, SPATIAL INEQUALITY, REMITTANCE, LOCAL GOVERNMENTS, SPATIAL EQUITY, CITY MANAGER, CENTRAL GOVERNMENT, DOMESTIC MARKET, DEVELOPING COUNTRIES, EXPORTS, URBAN GOVERNANCE, URBAN AREAS, EXPORTERS, REVENUES, GOVERNMENT REVENUE, MAYORS, INCENTIVES, FIRM PERFORMANCE, TAX RATES, CAPACITY BUILDING, VARIABLES, CITY MANAGEMENT, REGIONAL POLICIES, MARKET, TAX, INPUTS, CITIES, TRADE LIBERALIZATION, REGIONAL GOVERNMENTS, URBAN DEVELOPMENT, EXPORTER, CITY GOVERNMENTS, REVENUE SOURCES, PROPRIETORSHIP, DEVELOPING COUNTRY, MUNICIPALITIES, GOVERNANCE, REGION, TAXATION, ECONOMIC DEVELOPMENT, MACROECONOMIC SHOCKS, TRADE, LEGAL FRAMEWORKS, GDP, GOODS, INFLUENCE, FIXED ASSETS, REGIONS, STOCKS, INVESTMENT, REGIONAL REVENUE, TARIFF, SPATIAL INEQUALITIES, METROPOLITAN AREAS, DECENTRALIZATION, URBAN MANAGEMENT, REVENUE, REGIONAL GOVERNMENT, CHECK, SERVICE CHARGES, REGIONAL CITY, MARKETS, MAYOR, LOCAL GOVERNMENT, COMMUNITY, TAX BASE, SUB-NATIONAL REGIONS, REGIONAL SCIENCE, URBAN ECONOMICS, LABOR MARKETS, OUTCOMES, AGRARIAN ECONOMY, TOTAL EMPLOYMENT, SERVICE DELIVERY, POLICY CHANGES, LEGAL FRAMEWORK, FINANCE, INFRASTRUCTURE, TAXES, FUTURE RESEARCH,
Online Access:	http://documents.worldbank.org/curated/en/2015/12/25658151/decentralization-ethiopia-benefits http://hdl.handle.net/10986/23574
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