Does Regional Favoritism Affect Public Investment Budget Allocation? Evidence from Cameroon in the Context of Decentralization

Abstract

Do officials appointed by the President of the Republic to high positions of responsibility in Cameroon’s public administration influence the allocation of the Public Investment Budget (BIP) in their native departments? If so, what are the motivations and consequences of this type of regional favoritism? To answer this question, we exploited an original database that includes all 58 departments in Cameroon from 2013 to 2020. The results indicate that officials appointed by the President of the Republic who are born in specific departments receive preferential treatment in the allocation of subnational discretionary BIP. This regional favoritism is driven more by electoral motivations than economic considerations. Indeed, to retain their appointed position, which is a discretionary act of the President of the Republic, officials maneuver to ensure that their department of origin benefits more from state subsidies to maximize total electoral and political support. However, regional favoritism has a significant socio-economic impact on the population residing in the native localities of the appointed officials. It creates an inefficient BIP allocation because it leads to an unequal distribution of BIP between departments and the implementation of projects that are not aligned with the actual needs of the beneficiary population. Thus, Cameroon’s public authorities adopt a BIP allocation formula primarily based on budgetary constraints and the socio-economic needs of the population.