Fiscal Devolution in East Asia

East Asian success at promoting economic growth and poverty reduction is well known. Since the early 1980s and particularly in recent years, sustained economic growth rates on the order of five percent have reduced poverty rates by half. But it is a clear fact of contemporary geopolitics that not all people in developing nations are benefiting nor are they well connected within rapidly expanding economies. Particularly for women, children and rural residents, the same basic entitlements to publicly provided goods and services are not accessible. As economic growth has progressed, poverty has come to be manifest in pockets of exclusion. Income and access to economic opportunity reveals increasing rather than decreasing inequality both across the region and within countries. Such opportunity is sharply differentiated by age and gender, level of education, urban-rural, upland-lowland, and other variables including ethnicity and geographic barriers to transportation and commerce. Across Asia Pacific, and most marked in East Asia, one common feature of policy and institutional packages applied by governments keen to foster growth alongside poverty reduction has been to assign state powers, responsibilities and resources to sub-national authorities and to private and civil society agencies under various forms of contracts, partnerships and other principal-agent arrangements. Decentralization has become a catch-all term for what proves in practice to be a highly differentiated, and differently motivated, range of practices and inst...