The Effects of Fiscal Decentralization on Health and Education Spending and Outcomes: Evidence from Ethiopia

This thesis explores the impacts of fiscal decentralization on woreda level spending and local health and education outcomes in the Amhara region of Ethiopia. Using fiscal decentralization theory, we predict that local conditions will affect future local spending patterns because local governments possess superior information and respond to heterogeneous preferences. In similar fashion, we also predict that local spending patterns will impact future outcomes. Government collected household survey data and local government expenditure data are used to investigate this theory. While results indicate that some woreda conditions have an effect on future local spending behavior, the effect of local spending on future outcomes is ambiguous