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