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Much of the recent worldwide trend towards devolution has been driven by the belief that fiscal decentralisation is likely to have a positive effect on government efficiency and economic growth. It is generally assumed that the transfer of powers and resources to lower tiers of government allows for a better matching of public policies to local needs and thus for a better allocation of resources. These factors, in turn, are expected to lead to an improvement in regional economic performance, if subnational authorities shift resources from current to capital expenditures in search of a better response to local needs. In this paper we test these assumptions empirically by analysing the evolution of subnational expenditure categories and regional growth in Germany, India, Mexico, Spain, and the USA. We find that, contrary to expectations, decentralisation has coincided in the sample countries with a relative increase in current expenditures at the expense of capital expenditures, which has been associated with lower levels of economic growth in countries where devolution has been driven from above (India and Mexico), but not in Spain, where it has been driven from below. We hypothesise that the differences in legitimacy between the central or federal government and subnational governments in top-down and bottom-up processes of devolution may be at the origin of the diverse capacity to deliver greater allocative and productive efficiency and, eventually, greater economic growth by devolved governments. [ABSTRACT FROM AUTHOR]

This article studies the Mexican state-level impact on health outcomes of the decentralization of health funding and responsibilities that took place in 1997. Since the reform took place simultaneously in all states, we focus on a difference in difference estimation of whether those states that received more funds achieved better health outcomes after health services decentralization. According to our results, those states that received more funds did not boost the advances in health outcomes already achieved under the centralized health sector regime. There are two main possible explanations for these results. First, the allocation among states of the earmarked fund that was created as a result of the reform failed to take into account state-specific health needs. Second, the decentralization reform was not enough since it did not concede more tax autonomy to states and no other mechanisms were implemented to maintain states accountable for their health expenditure decisions. [ABSTRACT FROM AUTHOR]

This article examines how political context affects the strategic choice of nomination rules, using data from federal and state-level legislative elections. Our analysis indicates that competition affects the selection rules parties adopt. Overall, parties are most likely to use open selection rules when they think they will win, largely due to the effects of activist competition over coveted nominations. However, state-level party leaders have not been consistently empowered by decentralization. Although state-level party leaders do have nonnegligible influence when it comes to the selection of local legislative nominees, they have more influence in those states that are the most dependent on the federal government for resources. Competitive context continues to be a stronger predictor of selection rule choice than decentralization. [ABSTRACT FROM AUTHOR]