We investigate the degree of leeway donors of foreign aid should grant to recipient governments when their preferences over how to implement the aid are different, and both the donor and recipient possess some private information about the most effective policies. Intuitively, our model shows...

Since 1975, Viet Nam has gradually decentralized more fiscal responsibilities to local authorities. This study has two objectives: (i) to take stock of the current institutional framework for intergovernmental fiscal relations in Viet Nam, and (ii) to empirically assess the debt sustainability...

Indonesia faces serious challenges in the number, cost, quality, and distribution of teachers. This paper examines the role of political economy factors in producing these challenges and shaping efforts to resolve them. It argues that the challenges have their origins in the way in which...

This article revisits government failure theory by examining the relationship between government decentralization and the size of the nonprofit sector (NPS). Government failure theory posits that nonprofits are most active in regions where the largest gap exists between the homogeneous supply of...

Professional civil service recruitment is a core component of governance for development, as it is necessary for ensuring the capacity of civil servants, service delivery, fiscal sustainability, and proper salary management. Through an ambitious mixed method approach, this study seeks to provide...

Over the past decade, decentralization of fiscal and policy-making authority has become a cornerstone of development organizations? recommendations for good governance. Yet the institutional design of multilayered government can create tensions as new elites attempt to fill governing spaces long...

Hayek argues that local knowledge is a key for understanding whether production should be decentralized. This paper tests Hayek?s predictions by examining the causes of the Chinese government?s decision to decentralize state-owned enterprises. Since the government located closer to a state-owned...

We study a simple coordination problem to understand the difference between centralized and decentralized economic systems. The decentralized system is more robust than the centralized system to communication errors. But the centralized system takes less time than the decentralized system to...

Subcontracting has become a prominent business practice across many industries. Subcontracting of industrial production is generally based on short-term need for additional processing capacity, and is oftentimes employed by manufacturers to process customer orders more quickly than using only...