IMPACT OF FISCAL DECENTRALIZATION ON CORRUPTION: A CASE STUDY OF KADUNA STATE.

Abstract

The level of impoverishment seen in major Local government areas in Nigeria has been blamed on the embezzlement of public funds at the upper echelons of government and several empirical studies have suggested fiscal decentralization (FD) as a therapy for this problem. The degree of FD in each Local government was measured using four indicators, namely, revenue indicator (RI), expenditure indicator (EI), autonomy indicator (AI), and capital indicator (CI) across three econometric models. Using panel data from 2006 to 2023 to examine the effect of FD on corruption in the 23 Local government areas in Kaduna state, the study's findings indicate that AI and CI positively impacts corruption while (RI) decreases corruption. Based on these findings, the state government is encouraged to promote FD by increasing local governments' revenue-generating capacity while also putting measures in place) to perform oversight functions and prevent the abuse of public funds.

Keywords: Fiscal Decentralization, Corruption, Local Governments, Autonomy.