Author ORCID Identifier

https://orcid.org/0000-0002-2822-3420

Date of Award

Summer 7-31-2022

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

Dr. Jorge Martinez-Vazquez

Second Advisor

Dr. Andrew Feltenstein

Third Advisor

Dr. Charles Hankla

Fourth Advisor

Dr. Mark Rider

Abstract

This dissertation comprises two essays on decentralization and political institutions. The first chapter of the dissertation investigates how national levels of corruption are influenced by the interaction of two factors in political decentralization: the presence of local elections and the organizational structure of national parties. Previous studies have focused primarily on the role of fiscal decentralization on corruption and have mostly ignored the institutions of political decentralization. Using new data in a series of expansive models across multiple countries and years, we find that corruption will be lower when local governments are more accountable to and more transparent towards their constituents. This beneficial arrangement is most likely when local elections are combined with non-integrated political parties, where party institutions themselves are decentralized from national control. Such an institutional arrangement maximizes local accountability by putting the decision to nominate and elect local leaders in the hands of those best in a position to evaluate their honesty – local electors.

The second chapter analyzes how political institutions, and in particular party institutionalization, can mediate the impact of fiscal decentralization on climate change. Decentralization has remained an important shift in governance structure throughout the world in the past few decades. The economics literature, thus far, has not provided conclusive evidence regarding the impact of fiscal decentralization on combatting climate change. Decentralized decision making may be seen as antagonistic to the large externalities that typically characterize climate change policies. However, the local under-provision of public goods with externalities may be mediated by the presence of “institutionalized political parties.” These latter have a stable party organizational structure and strong linkage to voters, providing the incentives and capacity to shape the incentives of local elected officials. Using a large panel data set for 75 countries from 1971 to 2018, we find that the presence of strong party institutionalization significantly improves the functional role of fiscal decentralization in combating climate change, when the latter is measured by the reduction of CO2 emissions and the promotion of renewable energy consumption.

DOI

https://doi.org/10.57709/30506728

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