Does Decentralisation address allocative efficiency at the local level

DOES DECENTRALISATION ADDRESS ALLOCATIVE EFFICIENCY AT THE LOCAL LEVEL? EVIDENCE FROM JOMORO DISTRICT ASSEMBLY IN GHANA

DOES DECENTRALISATION ADDRESS ALLOCATIVE EFFICIENCY AT THE LOCAL LEVEL? EVIDENCE FROM JOMORO DISTRICT ASSEMBLY IN GHANA

INTERNATIONAL CONFERENCE ON MARGINALISATION, POVERTY AND DECENTRALISATION

Presented by:

CHRISTOPHER DICK-SAGOE DOCTORAL FELLOW, VNSGU, SURAT, INDIA

INTRODUCTION The greatest theoretical argument of decentralisation is allocative efficiency (Oates, 1968)

Allocative efficiency simply means providing local public goods to meet the needs and preferences of local citizens. This study adopted a different approach (hardly used by other researchers) in measuring allocative efficiency - (Revenue and expenditure data of sub national government) The study made use of revenue and expenditure data of sub national government

PROBLEM STATEMENT This research was carried out on the need to measure allocative efficiency from a different perspective

Studies on impact of decentralisation have focused much on indirect benefits such as local development, poverty, regional disparity

There is the need to test the direct impact of decentralisation; which is allocative efficiency (Oates, 1968)

RESEARCH OBJECTIVES AND QUESTIONS • To assess Jomoro District Assembly’s financial capacity to provide local needs as expressed in their development plan; and • To establish the difference between the expenditure on public goods and other district expenditure.

What financial capacity does Jomoro District have to provide the preferences and needs of its citizens? • How different are public goods expenditure from other district expenditure in Jomoro District Assembly? •

LITERATURE REVIEW Definition Allocative efficiency simply means providing local public goods to meet the needs and preferences of local citizens

How empirical studies have assessed allocative efficiency of decentralisation i. Feelings of citizens and tax payers to assess allocative efficiency (Diaz-Serrano and Rodriguez-Pose, 2015; and Hellman et. al., 2003) ii. Perceived satisfaction levels of local citizens from service provision (Martinez- Vazquez, Lagos-Penas and Sacchi, 2015; and Chen, Huang and Li, 2016)

iii. World Bank (1995) matched sub national governments’ service provision with local preferences to measure allocative efficiency

CONCEPTUAL FRAMEWORK Revenue

Fiscal Decentralisation

Expenditure

RESEARCH METHODOLOGY The study adopted a quantitative research approach. Secondary data was used for the study, which comprised of revenue and expenditure from 2010 to 2015 of Jomoro District Assembly. Descriptive statistics (Percentages) were used

Statistical tools such as student t- distribution was used for the analysis at an alpha of 0.01.

DATA ANALYSIS Objective 1: To assess the financial capacity of Jomoro District Assembly to provide local needs as expressed in their development plan. The study utilised the actual revenues used to finance social services for the period under investigation (2010 to September, 2015) against estimated expenditure for the provision of those social services under the same period. Table1: t-Test: Two-Sample Assuming Unequal Variances Actual

Mean Variance Observations Hypothesized Mean Difference Df t Stat P(T