Decentralization and welfare: theory and an empirical analysis using Philippine data

Canare, Tristan

doi:10.3326/pse.45.1.3.

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Decentralization and welfare: theory and an empirical analysis using Philippine data

Tristan Canare*

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https://doi.org/10.3326/pse.45.1.3

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Table 2
Regression results

	Income per capita			HDI			Poverty
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)

fiscal_indep	10,935***	14,638***	8,981*	0.0701**	0.0847***	0.0776**	-4.717	-7.551	-3.679
fiscal_indep	(4,094)	(4,263)	(5,072)	(0.0302)	(0.0311)	(0.0326)	(7.011)	(6.583)	(9.013)
sng_popn	-291.8**	-855.2***	-504.4***	-0.00426***	-0.0116***	-0.00579***	0.486*	1.573***	1.086***
sng_popn	(133.3)	(289.0)	(152.6)	(0.00121)	(0.00222)	(0.00129)	(0.292)	(0.467)	(0.270)
sng_area	97.04	91.45	-65.16	0.000610	0.00106	-0.000264	-0.518***	-0.382*	-0.497**
sng_area	(146.6)	(137.8)	(125.9)	(0.00111)	(0.00107)	(0.00104)	(0.187)	(0.227)	(0.214)
fiscal_indep*governance		812.5***			0.00446***			-0.540**
fiscal_indep*governance		(165.1)			(0.00124)			(0.227)
sng_popn*governance		17.86***			0.000203***			-0.0266**
sng_popn*governance		(6.722)			(5.29e-05)			(0.0115)
sng_area*governance		-4.601			-5.12e-05			-0.00107
sng_area*governance		(4.357)			(3.69e-05)			(0.00600)
fiscal_indep*lowinc			-26,005***			-0.0596			18.37
fiscal_indep*lowinc			(7,574)			(0.0540)			(13.30)
sng_popn*lowinc			-813.6***			-0.00624***			2.008***
sng_popn*lowinc			(258.6)			(0.00227)			(0.467)
sng_area*lowinc			1.739			0.000923			-0.724*
sng_area*lowinc			(227.9)			(0.00191)			(0.408)
governance	84.94***	119.7***	78.36***	0.000535***	0.000802***	0.000481***	-0.0935***	-0.129***	-0.103***
governance	(22.12)	(21.10)	(21.09)	(0.000170)	(0.000165)	(0.000157)	(0.0282)	(0.0290)	(0.0278)
lowinc			-6,140***			-0.0517***			7.770***
lowinc			(1,001)			(0.00738)			(1.424)

Observations	237	237	237	237	237	237	237	237	237
R-squared	0.749	0.777	0.798	0.814	0.826	0.851	0.666	0.680	0.736
Notes	1. Heteroskedasticity-robust SEs in parentheses 2. * p<0.01, p<0.05, * p<0.1 3. Results are robust to the use of cluster-robust SEs 4. Control variables included: year fixed effects, island group fixed effects, governance, educ, and urban 5. Results are robust to adding bankdep and provrevpc among the controls			1. Heteroskedasticity-robust SEs in parentheses 2. * p<0.01, p<0.05, * p<0.1 3. Results are robust to the use of cluster-robust SEs 4. Control variables included: year fixed effects, island group fixed effects, governance, educ, and urban 5. Results are robust to adding bankdep and provrevpc among the controls			1. Heteroskedasticity-robust SEs in parentheses 2. * p<0.01, p<0.05, * p<0.1 3. When cluster-robust SEs are used: a) sng_area and most of the significant interaction terms became insignificant; b) fiscal_indep remains insignificant 4. Control variables included: year fixed effects, island group fixed effects, governance, educ, and urban 5. When bankdep and provrevpc were included among the controls: a) about half of the significant decentralization variables and their interaction terms became insignificant; b) fiscal_indep remains insignificant

Note: Table shows the decentralization independent variables only. Complete results available upon request.

Table A1
Summary statistics

Variable	Description		Mean	Std. Dev.	Observations
per capita income	Per capita income (PPP) in 2012 Metro Manila Philippine Peso (PhP)	overall	40,772	12,173	N = 240
		between		11,652	n = 80
		within		3,678	T = 3
hdi	Human development index	overall	0.53	0.11	N = 240
		between		0.11	n = 80
		within		0.03	T = 3
poverty	Population poverty incidence (in %)	overall	36.00	14.99	N = 240
		between		14.28	n = 80
		within		4.76	T = 3
fiscal_indep	Ratio of provincial government own-sourced revenue to provincial government expenditures	overall	0.18	0.16	N = 240
		between		0.15	n = 80
		within		0.06	T = 3
sng_popn	Number of local government units (cities and municipalities) per 100 thousand population	overall	3.38	4.18	N = 240
		between		4.19	n = 80
		within		0.23	T = 3
sng_area	Number of local government units (cities and municipalities) per 1,000 square kilometers	overall	6.83	5.20	N = 240
		between		5.22	n = 80
		within		0.00	T = 3
governance	Good governance index	overall	123.81	23.36	N = 237
		between		23.46	n = 79
		within		0.00	T = 3
educ	Mean years of schooling	overall	8.24	1.11	N = 240
		between		1.03	n = 80
		within		0.44	T = 3
urban	Percent of population living in urban areas	overall	25.49	22.96	N = 240
		between		22.97	n = 80
		within		1.95	T = 3
bankdep	Total bank deposits in millions PhP	overall	15,861.98	29,186.78	N = 239
		between		28,184.31	n = 80
		within		7,847.41	T = 2.99
provrevpc	Provincial government total revenue per capita	overall	1,293.80	1,357.46	N = 240
		between		1,305.74	n = 80
		within		389.86	T = 3

N = number of observations; n = number of cross-sections (provinces); T / T-bar = number of / average number of time periods

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