Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/190080
Authors: 
Fumey, Abel
Year of Publication: 
2018
Series/Report no.: 
WIDER Working Paper 2018/31
Abstract: 
This paper examines the influence of political considerations on intergovernmental fiscal transfers in Ghana. The two-step system GMM approach was used to estimate transfers and elections data for 167 districts from 1994 to 2014. The analysis was country-wide and covers swing districts as well as aligned districts, while the democracy transitions from "new" to "mature". The results show that each district received on average Gh.6.28 million per year and the amount generally increased by 8.4 per cent in election years. The increase favoured the swing districts over the non-swing ones, as the former received 5.2 per cent more than the latter. Aligned districts in the new democracy received 2.0 per cent more while it was 5.0 per cent more for swing districts in the mature democracy. In conclusion, the study finds that the allocation formula was politically influenced and as a preventive measure, a revision of the formula at intervals of five years - backed by legislation - is recommended.
Subjects: 
political economy
fiscal transfers
allocation formula
redistributive politics
JEL: 
D72
H73
H77
ISBN: 
978-92-9256-473-5
Document Type: 
Working Paper
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