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Spatial Decentralization and Programme Evaluation: Theory and an Example
Author(s) -
Pitt Mark M.,
Me Nidhiya
Publication year - 2019
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/obes.12265
Subject(s) - decentralization , instrumental variable , census , space (punctuation) , identification (biology) , variable (mathematics) , econometrics , welfare , process (computing) , separable space , government (linguistics) , variables , function (biology) , public economics , economics , computer science , mathematics , statistics , sociology , mathematical analysis , population , linguistics , philosophy , botany , demography , market economy , biology , operating system , evolutionary biology
This paper proposes an instrumental variable method for programme evaluation that only requires a single cross‐section of data on the spatial intensity of programmes and outcomes. The instruments are derived from a simple theoretical model of government decision‐making in which governments are responsive to the attributes of places, rather than to the attributes of individuals, in making allocation decisions across space, and have a social welfare function that is spatially weakly separable, that is, that the budgeting process behaves as if it is multi‐stage with respect to administrative districts and sub‐districts. The spatial instrumental variables model is then estimated and tested with a single cross‐section of Indonesian census data. The results offer support to the identification strategy proposed but also highlight some issues affecting validity.