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

Donors increasingly fund interventions to counteract inequality in developing countries, where they fear it can foment instability and undermine nation-building efforts. To succeed, aid relies on the principle of upward accountability to donors. But federalism shifts the accountability of subnationa...

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Main Authors:	Khan, Qaiser, Faguet, Jean-Paul, Ambel, Alemayehu
Format:	Journal Article
Published:	Elsevier 2018
Subjects:	INEQUALITY LOCAL GOVERNMENT WOREDAS PARTICIPATION DECENTRALIZATION
Online Access:	http://hdl.handle.net/10986/29139

id	okr-10986-29139
recordtype	oai_dc
spelling	okr-10986-291392021-05-25T10:54:42Z Blending Top-Down Federalism with Bottom-Up Engagement to Reduce Inequality in Ethiopia Khan, Qaiser Faguet, Jean-Paul Ambel, Alemayehu INEQUALITY LOCAL GOVERNMENT WOREDAS PARTICIPATION DECENTRALIZATION Donors increasingly fund interventions to counteract inequality in developing countries, where they fear it can foment instability and undermine nation-building efforts. To succeed, aid relies on the principle of upward accountability to donors. But federalism shifts the accountability of subnational officials downward to regional and local voters. What happens when aid agencies fund anti-inequality programs in federal countries? Does federalism undermine aid? Does aid undermine federalism? Or can the political and fiscal relations that define a federal system resolve the contradiction internally? We explore this paradox via the Promotion of Basic Services program in Ethiopia, the largest donor-financed investment program in the world. Using an original panel database comprising the universe of Ethiopian woredas (districts), the study finds that horizontal (geographic) inequality decreased substantially. Donor-financed block grants to woredas increased the availability of primary education and health care services in the bottom 20% of woredas. Weaker evidence from household surveys suggests that vertical inequality across wealth groups (within woredas) also declined, implying that individuals from the poorest households benefit disproportionately from increasing access to, and utilization of, such services. The evidence suggests that by combining strong upward accountability over public investment with enhanced citizen engagement on local issues, Ethiopia’s federal system resolves the instrumental dissonance posed by aid-funded programs to combat inequality in a federation. 2018-01-10T22:26:58Z 2018-01-10T22:26:58Z 2017-08 Journal Article World Development 0305-750X http://hdl.handle.net/10986/29139 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Elsevier Publications & Research :: Journal Article Publications & Research Africa Ethiopia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	INEQUALITY LOCAL GOVERNMENT WOREDAS PARTICIPATION DECENTRALIZATION
spellingShingle	INEQUALITY LOCAL GOVERNMENT WOREDAS PARTICIPATION DECENTRALIZATION Khan, Qaiser Faguet, Jean-Paul Ambel, Alemayehu Blending Top-Down Federalism with Bottom-Up Engagement to Reduce Inequality in Ethiopia
geographic_facet	Africa Ethiopia
description	Donors increasingly fund interventions to counteract inequality in developing countries, where they fear it can foment instability and undermine nation-building efforts. To succeed, aid relies on the principle of upward accountability to donors. But federalism shifts the accountability of subnational officials downward to regional and local voters. What happens when aid agencies fund anti-inequality programs in federal countries? Does federalism undermine aid? Does aid undermine federalism? Or can the political and fiscal relations that define a federal system resolve the contradiction internally? We explore this paradox via the Promotion of Basic Services program in Ethiopia, the largest donor-financed investment program in the world. Using an original panel database comprising the universe of Ethiopian woredas (districts), the study finds that horizontal (geographic) inequality decreased substantially. Donor-financed block grants to woredas increased the availability of primary education and health care services in the bottom 20% of woredas. Weaker evidence from household surveys suggests that vertical inequality across wealth groups (within woredas) also declined, implying that individuals from the poorest households benefit disproportionately from increasing access to, and utilization of, such services. The evidence suggests that by combining strong upward accountability over public investment with enhanced citizen engagement on local issues, Ethiopia’s federal system resolves the instrumental dissonance posed by aid-funded programs to combat inequality in a federation.
format	Journal Article
author	Khan, Qaiser Faguet, Jean-Paul Ambel, Alemayehu
author_facet	Khan, Qaiser Faguet, Jean-Paul Ambel, Alemayehu
author_sort	Khan, Qaiser
title	Blending Top-Down Federalism with Bottom-Up Engagement to Reduce Inequality in Ethiopia
title_short	Blending Top-Down Federalism with Bottom-Up Engagement to Reduce Inequality in Ethiopia
title_full	Blending Top-Down Federalism with Bottom-Up Engagement to Reduce Inequality in Ethiopia
title_fullStr	Blending Top-Down Federalism with Bottom-Up Engagement to Reduce Inequality in Ethiopia
title_full_unstemmed	Blending Top-Down Federalism with Bottom-Up Engagement to Reduce Inequality in Ethiopia
title_sort	blending top-down federalism with bottom-up engagement to reduce inequality in ethiopia
publisher	Elsevier
publishDate	2018
url	http://hdl.handle.net/10986/29139
_version_	1764468592945922048

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

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