Fiscal Decentralization and Its Role in Poverty Reduction: Insights from the ARDL Model

Abstract

This paper aims at analyzing the impact of Fiscal Decentralization and Its Role in Poverty Reduction: Insights into ARDL Model. The estimation range is 1975 to 2023 to use the ADF (Augmented Dickey Fuller 1979) at the level and 1st difference to confirm the stratification of the variables. This study has applied, the ARDL approach is applied to model on the mix result (1(0), I(1)) of ADF estimation bases. The outcome discloses that there is a direct and indirect influence of the poverty eradication by fiscal decentralization. When the living stander of the people in Pakistan is given the autonomy by the central government, the living stander of the people in Pakistan can be raised by enhancing the agricultural output, industrial production, education and health facilities as well as country defense. The analysis recommends that the government ought to mount the direct tax on the wealthy individual more and receive the income and use it on the poor particularly backwards times and offer alternative amenities such as no cost education, health facilities and clean water.