Decentralization and the provision of public services : framework and implementation
AbstractThis paper discusses decentralization (administrative, fiscal and political) of government in public service provision. It aims to facilitate understanding among practitioners, policy makers, and scholars about what decentralization entails in practice compared to theory. A review of the empirical literature and experience of decentralization is presented. The paper highlights issues that policy makers in developing and transitional countries should be aware of when reforming government, considering their unique political and economic environment. The author argues that decentralization produces efficiency gains stemming from inter-jurisdictional competition, enhanced checks and balances over the government through voting at the subnational level, and informational advantages due to proximity to citizens. By contrast, arguments against decentralization includethe risk of an increased level of corruption, coordination problems stemming from multiple layers of government, low capacity of subnational government, and unproductive inter-jurisdictional competition. Decentralization itself does not render increased government effectiveness in public service provision. Instead, the effectiveness of government largely depends on the quality of human capital and institutions.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4503.
Date of creation: 01 Feb 2008
Date of revision:
Banks&Banking Reform; Public Sector Economics&Finance; Intergovernmental Fiscal Relations and Local Finance Management; Debt Markets; Economic Theory&Research;
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Roy Bahl, 1999.
"Implementation Rules For Fiscal Decentralization,"
International Center for Public Policy Working Paper Series, at AYSPS, GSU
paper9901, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- Roy Bahl, 1999. "Implementation Rules For Fiscal Decentralization," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9803, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- Olson, Mancur, Jr, 1969. "The Principle of "Fiscal Equivalence": The Division of Responsibilities among Different Levels of Government," American Economic Review, American Economic Association, vol. 59(2), pages 479-87, May.
- Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
- Bahl, Roy & Martinez-Vazquez, Jorge, 2006.
"Sequencing fiscal decentralization,"
Policy Research Working Paper Series
3914, The World Bank.
- Timothy J. Bartik, 2003. "Local Economic Development Policies," Upjohn Working Papers and Journal Articles 03-91, W.E. Upjohn Institute for Employment Research.
- Mariano Tommasi, 2002. "Federalism in Argentina and the Reforms of the 1990s," Working Papers 48, Universidad de San Andres, Departamento de Economia, revised May 2002.
- Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
- Cremer, Jaques & Estache, Antonio & Seabright, Paul & DEC, 1994. "The decentralization of public services : lessons from the theory of the firm," Policy Research Working Paper Series 1345, The World Bank.
- David E. M. Sappington & Joseph E. Stiglitz, 1988.
"Privatization, Information and Incentives,"
NBER Working Papers
2196, National Bureau of Economic Research, Inc.
- Robin Boadway & Anwar Shah, 2007. "Intergovernmental Fiscal Transfers : Principles and Practice," World Bank Publications, The World Bank, number 7171, March.
- Ebel, Robert D. & Yilmaz, Serdar, 2002. "On the measurement and impact of fiscal decentralization," Policy Research Working Paper Series 2809, The World Bank.
- Dilip Mookherjee & Pranab Bardhan, 2005.
"Decentralization, Corruption And Government Accountability: An Overview,"
Boston University - Department of Economics - Working Papers Series
WP2005-023, Boston University - Department of Economics, revised Jun 2005.
- Pranab Bardhan & Dilip Mookherjee, 2005. "Decentralization, Corruption and Government Accountability: An Overview," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-152, Boston University - Department of Economics.
- Boadway, Robin & Roberts, Sandra & Shah, Anwar, 1994. "The reform of fiscal systems in developing and emerging market economies : a federalism perspective," Policy Research Working Paper Series 1259, The World Bank.
- Jonathan Rodden, 2000. "Decentralization and the Challenge of Hard Budget Constraints," World Bank Other Operational Studies 11426, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.