Blending Top-Down Federalism with Bottom-Up Engagement to Reduce Inequality in Ethiopia

Khan, Qaiser ; Faguet, Jean-Paul ; Ambel, Alemayehu

World Bank, Washington, DC

关键词: SANITATION;    PUBLIC OFFICIALS;    BASIC SERVICES;    ECONOMIC GROWTH;    CONTRACEPTION;   

DOI  :  10.1596/1813-9450-7511
RP-ID  :  WPS7511

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Donors increasingly fund interventionsto counteract inequality in developing countries, where theyfear it can foment instability and undermine nation-buildingefforts. To succeed, aid relies on the principle of upwardaccountability to donors. But federalism shifts theaccountability of subnational officials downward to regionaland local voters. What happens when aid agencies fundanti-inequality programs in federal countries? Doesfederalism undermine aid? Does aid undermine federalism? Orcan the political and fiscal relations that define a federalsystem resolve the contradiction internally? This studyexplores this paradox via the Promotion of Basic Servicesprogram in Ethiopia, the largest donor-financed investmentprogram in the world. Using an original panel databasecomprising the universe of Ethiopian woredas (districts),the study finds that horizontal (geographic) inequalitydecreased substantially. Donor-financed block grants toworedas increased the availability of primary education andhealth care services in the bottom 20 percent of woredas.Weaker evidence from household surveys suggests thatvertical inequality across wealth groups (within woredas)also declined, implying that individuals from the pooresthouseholds benefit disproportionately from increasing accessto and utilization of such services. The evidence suggeststhat by combining strong upward accountability over publicinvestment with extensive citizen engagement on localissues, Ethiopia’s federal system resolves the instrumentaldissonance posed by aid-funded programs to combat inequalityin a federation.