| This thesis addresses two important questions faced by less developed countries: the consequences of high levels of poverty and inequality on violence and human capital accumulation; and the effectiveness of government decentralization reforms in reducing poverty and inequality.;The first chapter uses five rounds of a household data-set for four major Colombian cities; it finds that after controlling for various socio-economic characteristics, districts with higher inequality are associated with a higher probability of kidnap victimization among households, and with a significant increase in decisions to migrate abroad. Evidence on positive selection of urban migrants from Colombia is also found; contradicting Borjas's "negative selection theory" and supporting the idea that inequality is fuelling a "brain drain" from the country.;The second chapter uses a seven year panel data-set containing political, fiscal and school information at the municipality level, to evaluate the effect of decentralization reforms implemented in 1993 in Colombia on its public education system. The main finding is that the quality gap between private and public schools (measured by results of a standardized high school test) has increased since the reforms took place. No evidence is found for any of the common pitfalls of decentralization discussed in the political economy literature, such as unfunded mandates, local capture or lower technical ability of local governments to manage schools. Instead, the reduction of average test scores in the public schools is explained by a significant reduction in drop-out rates in public schools, suggesting that the reforms had significant effects on households' schooling investment decisions.;Finally, chapter three uses an Indonesian household survey to evaluate the impact of decentralization reforms in 2001 on provision of water services. Using a triple difference methodology, and incidence of a water-borne disease (diarrhea) among children as a proxy for service quality, it provides evidence that political design of decentralization crucially affected its impact. Only in cities where devolution was accompanied by reforms ensuring political accountability of local governments to residents was there a negative and significant impact of decentralization reforms on local water quality. |
