Different dimensions of decentralization and rural–urban poverty in Pakistan

Abstract

AbstractThe process of decentralization plays a vital role to enhance the welfare of society through the provision of public goods and services. This study investigates the impact of different dimensions of decentralization on rural–urban poverty and total poverty for Pakistan. For empirical analysis, this study uses time‐series data covering the period from 1980 to 2018. The auto‐regressive distributive lag model bounds testing cointegration method is used for long‐run estimation and error correction dynamic for short‐run movements of variables. The results show that fiscal and administrative decentralization are more beneficial for overall and rural–urban poverty reduction. The surprising results of political decentralization increases poverty overall in the case of Pakistan. For poverty reduction, the government should try to reduce the political concentration of elite groups in Pakistan. Moreover, to curtail poverty, government policy should be focused on effective strategies to address inflation and development of GDP per capita growth.