Afua Branoah Banful
PhD Candidate, Harvard University, Department of Economics
Research Fellow, Center for Global Development
Tuesday, December 11, 2007
(Please bring your lunch--drinks provided.)
Center for Global Development
1800 Massachusetts Avenue, NW, Third Floor, Washington, DC
Abstract: Analyses of how coveted central government resources in Africa are transferred to different regions within a country have shown widespread patronage, ethnic cronyism and pork barrel politics. Politics as the basis of relative development between tribes, classes and geographic regions elicits negative consequences both economically and politically. This paper presents an empirical investigation of Ghana's formula-based transfer of funds from the centrally managed District Assemblies Common Fund (DACF) to local bodies responsible for development. I find that over time, the DACF program has shown decreasing evidence of allocating and disbursing a greater amount to a district that voted for the ruling government than a similar district that voted for the opposition. Notwithstanding this trend, actual disbursements show more evidence of political influence than promised allocations. Calculated counterfactual allocations suggest political influence in the determination of the formula at least in election years. I also find a persistent election cycle in the magnitude of annual disbursements and in the proportion of allocation that is actually disbursed. A possible mode of channeling more funds to an area is the creation of smaller districts each entitled to a certain base amount of DACF funds. I find evidence of only minimal political influence in the post-DACF redistricting of Ghana.