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Essays in governance and public finance

Mbate, Michael (2019) Essays in governance and public finance. PhD thesis, London School of Economics and Political Science.

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This thesis constitutes three distinct by related papers that examine how electoral and legislative institutions shape public spending behaviour in Kenya. The first paper examines how power sharing - the inclusion of opposition ministers into the cabinet - affects political corruption and accountability through direct audits of misappropriation of public funds and the associated likelihood of facing parliamentary sanctions. Exploiting a difference-in-difference design to address the endogenous allocation of ministerial portfolios, I find that opposition ministers misappropriated more resources than incumbent ministers for political gain, given their constrains in engaging in alternative strategies of electoral manipulation. Further analysis suggests that power sharing undermined political accountability by inducing bias in sanctioning corrupt politicians. I find that co-partisanship between ministers and the head of the Public Accounts Committee significantly lowered disciplinary sanctions. The second paper examines how political alignment between local and central government politicians affect the provision of local public goods and services. Using a regression discontinuity design on close elections, I find that aligned constituencies experienced a diferential increase in the proportion and value of projects abandoned midway through their construction cycle (stalled) and non-existing (ghost) projects. Stalled and ghost projects increased disproportionately at the end of the electoral year, suggesting that accumulated rents were more likely to be diverted for electoral gain. Consistent with alignment weakening political accountability, aligned constituencies received fewer legislative sanctions relative to unaligned constituencies. The third paper tests for public spending spillovers across local governments. Using an expenditure reform that led to a significant increase in public spending among several geographically proximate counties, I examine how counties sharing a geographical boundary reacted to the policy. Employing a spatial difference-in-diffierence design, I find evidence of free riding in border counties, relative to observationally similar counties located further away. Disaggregated data reveals that spillovers enhanced clientelistic political exchanges. Border counties shifted spending towards targeted goods, and these effects were stronger before elections and for hegemonic incumbents. Further results from micro-level surveys suggest that free riding was welfare reducing.

Item Type: Thesis (PhD)
Additional Information: © 2019 Michael Mbate
Library of Congress subject classification: J Political Science > JA Political science (General)
J Political Science > JS Local government Municipal government
Sets: Departments > International Development
Supervisor: Sequeira, Sandra

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