Fiscal decentralization and gender equality: empirical evidence across countries

Rafat Zaman, Mustafa

doi:10.3326/pse.48.2.4.

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Fiscal decentralization and gender equality: empirical evidence across countries

Mustafa Rafat Zaman*

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https://doi.org/10.3326/pse.48.2.4

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Table 1
Variables and data sources

Variables	Description	Sources
Democracy index	A snapshot of the state of democracy.	Economist Intelligence Unit
Gender equality index	A summary measure of progress towards gender equality	World Economic Forum
Financial development index	Indicator of depth, access and efficiency of financial institutions and markets.	International Monetary Fund
Government size	Index measuring the size of the public sector in terms of consumption, investment, transfers and subsidies etc.	Fraser Institute
Gender inequality index	A summary measure of progress towards gender inequality	United Nations Development Programme
Human development index	A summary measure of average achievement in key dimensions of human development.	United Nations Development Programme
Expenditure decentralization	The ratio of sub-central to general government spending.	Organisation for Economic Co-operation and Development
Union	The share of wage and salary earners that are trade union members	Organisation for Economic Co-operation and Development
Real GDP per capita	GDP per capita in 2015 U.S. dollars	World Bank
Urbanization	Ratio of Urban population to Total population
Population growth	Growth rate value
Land area (sq. km)	Land area value
Unemployment rate	Ratio of Unemployed to Total labor force
Exports	Ratio of Exports to GDP
Foreign direct investment	Ratio of Foreign direct investment to GDP
Population	Population value
Population density	Ratio of Population to Land Area
Government effectiveness	Governance indicator capturing the perceptions of government effectiveness

Source: Author’s compilation.

Table 1A
Descriptive statistics

Variable	Obs.	Mean	Std. Dev.	Min	Max
Gender equality index	432	0.75	0.05	0.64	0.91
Gender inequality index	432	0.12	0.08	0.01	0.43
Year	432	n/a	n/a	2006	2021
Expenditure decentralization (%)	431	32.40	16.12	5.60	69.11
Human development index	432	0.90	0.04	0.74	0.96
Log of Real GDP per capita	432	10.48	0.61	9.07	11.63
Government size	405	6.01	0.88	4.32	8.37
Urbanization (%)	432	77.82	10.96	53.73	98.12
Population growth (%)	432	0.64	0.68	-1.85	2.89
Unemployment rate (%)	432	7.39	4.17	2.01	27.47
Union	336	32.12	21.75	8.30	92.20
Exports (%)	432	52.96	34.63	10.20	211.43
Foreign direct investment (%)	432	5.68	16.64	-42.29	138.70
Financial development index	432	0.68	0.18	0.25	1.00
Government effectiveness	432	1.34	0.56	-0.31	2.35
Democracy index	378	8.40	0.89	5.57	9.93
Log of Population	432	16.44	1.49	12.62	19.62
Log of area (km2)	405	12.23	1.82	7.85	16.03
Log of Population density	405	4.20	1.38	0.98	6.25

Source: Author’s calculations.

Table 2
Basic regression results

	Dependent variable: Gender equality index
Variables	(1)	(2)	(3)	(4)
Expenditure decentralization	0.007	-0.042	-0.0321	0.542**
Expenditure decentralization	(0.079)	(0.062)	(0.068)	(0.233)
Real GDP per capita (log)		-6.826**
Real GDP per capita (log)		(2.910)
Government size		0.221	0.066	0.081
Government size		(0.707)	(0.715)	(0.430)
Urbanization		0.064	0.175	0.424***
Urbanization		(0.165)	(0.173)	(0.164)
Population growth		-0.107	-0.122	-0.633*
Population growth		(0.314)	(0.354)	(0.375)
Unemployment rate		-0.234**	-0.125	-0.0169
Unemployment rate		(0.095)	(0.092)	(0.084)
Union		0.325***	0.325***	0.219***
Union		(0.071)	(0.092)	(0.085)
Exports		0.085**	0.066***	0.108***
Exports		(0.031)	(0.024)	(0.035)
Foreign direct investment		0.015**	0.017**	0.024**
Foreign direct investment		(0.006)	(0.007)	(0.012)
Financial development		4.188	5.304	1.810
Financial development		(4.344)	(4.333)	(3.270)
Democracy		0.349	0.120	1.289*
Democracy		(1.031)	(1.053)	(0.744)
Human development index			-1.688	-10.860
Human development index			(25.740)	(21.210)
Constant	71.10***	118.8***	42.09*
Constant	(2.626)	(33.83)	(23.95)
No. of observations	431	288	288	288
Countries	27	27	27	27
Country fixed effects	Y	Y	Y	Y
Year effects	Y	Y	Y	Y
KP (F-stat)				10.323
P-value (J-Stat)				0.372

Note: P-values (clustered by country) appear in parentheses below estimates; *p<0.10, **p<0.05, ***p<0.01. Column 4 uses population (in logs) and government effectiveness as instruments for the decentralization measure. The KP (F-stat) refers to the Kleibergen Paap rk Wald F-statistic; the J-stat refers to Hansen’s overidentification test.

Source: Author’s calculations.

Table 4
Robustness checks

	Dependent variable
	Gender inequality index	Gender equality index
Variables	(5)	(6)	(7)	(8)
Expenditure decentralization	-0.354**	0.523**	0.390***	0.310**
Expenditure decentralization	(0.164)	(0.222)	(0.140)	(0.132)
Human development index	11.75	-10.56	-8.428	-7.144
Human development index	(14.70)	(20.95)	(19.39)	(18.81)
Government size	-1.379***	0.0803	0.077	0.075
Government size	(0.318)	(0.426)	(0.406)	(0.398)
Urbanization	-0.509***	0.415***	0.358**	0.323**
Urbanization	(0.146)	(0.161)	(0.139)	(0.138)
Population growth	0.813***	-0.616*	-0.498*	-0.426
Population growth	(0.252)	(0.365)	(0.299)	(0.277)
Unemployment rate	-0.180***	-0.021	-0.045	-0.061
Unemployment rate	(0.055)	(0.082)	(0.069)	(0.066)
Union	-0.107*	0.223***	0.247***	0.262***
Union	(0.062)	(0.083)	(0.076)	(0.075)
Exports	-0.057**	0.107***	0.097***	0.091***
Exports	(0.023)	(0.034)	(0.028)	(0.027)
Foreign direct investment	-0.015**	0.024**	0.022**	0.021**
Foreign direct investment	(0.008)	(0.011)	(0.01)	(0.009)
Financial development	2.096	1.926	2.737	3.226
Financial development	(2.444)	(3.234)	(3.115)	(3.133)
Democracy	-2.677***	1.250*	0.979	0.815
Democracy	(0.615)	(0.731)	(0.651)	(0.639)
No. of observations	288	288	288	288
Countries	27	27	27	27
Country fixed effects	Y	Y	Y	Y
Year effects	Y	Y	Y	Y
KP (F-stat)	10.323	10.363	12.100	18.61
P-value (J-Stat)	0.919	0.342	0.295	0.440

Note: P-values (clustered by country) appear in parentheses below estimates; * p<0.10, ** p<0.05, *** p<0.01. Instruments used for the decentralization measure are population (in logs) and government effectiveness in column 5; population density (in logs) and government effectiveness in column 6; population (in logs), area (in logs), and government effectiveness in column 7; population (in logs) and area (in logs) in column 8. The KP (F-stat) refers to the Kleibergen Paap rk Wald F-statistic; the J-stat refers to Hansen’s overidentification test.

Source: Author’s calculations.

Figure 1

Scatter plot of expenditure decentralization on gender equality across OECD countries, 2006-2021, with a linear regression line

DISPLAY Figure

Table 1

Variables and data sources

DISPLAY Table

Table 1A

Descriptive statistics

DISPLAY Table

Table 2

Basic regression results