IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Balance, accountability, and responsiveness : lessons about decentralization

Listed author(s):
  • Shah, Anwar

The author examines the reasons developing countries are reexamining the respective roles of the private sector, civil society, and various levels of government--and considering new fiscal arrangements between national and lower levels of government. Decentralization may be particularly well-suited to developing countries, where central governments are not aswell developed as in industrial countries--because information requirements and transaction costs are lower at lower levels of government and the government can be more responsive and accountable to the citizenry. Vital to the success of decentralized decisionmaking, says the author, are: 1) A broad public consensus that decentralization is appropriate. 2) Civil service reform designed to encourage a service orientation, to discourage command-and-control governance and rent-seeking, and to prevent the central government from having a direct say in the recruitment and promotion of subnational civil servants. 3) Proper monitoring and oversight of governance. Other lessons from experience (include): 1) When there is citizen participation and transparency in decisionmaking, limited budgeting, auditing, and accounting systems at the subnational level should not be considered a barrier to decentralization. Those technical capabilities can be borrowed from higher levels of government. 2) Indonesia and Pakistan provide good examples of"asymmetric"decentralization, in which various powers can be assigned to different levels of government, depending on capacity. 3) The delinking of taxing and spending decisions leads to lack of accountability in the public sector. 4) Revenue-sharing (tax-by-tax) distorts incentives for efficient tax collection. 5) Properly structured (simple, transparent, consistent with objectives) fiscal transfers can improve government accountability. Fiscal transfers can also be used to encourage competition for the supply of public goods. In Canada and Chile, for example, Catholic schools compete with public schools for financing.

If 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.

File URL:
Download Restriction: no

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2021.

in new window

Date of creation: 31 Dec 1998
Handle: RePEc:wbk:wbrwps:2021
Contact details of provider: Postal:
1818 H Street, N.W., Washington, DC 20433

Phone: (202) 477-1234
Web page:

More information through EDIRC

References listed on IDEAS
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.:

in new window

  1. Anwar Shah, 1996. "A Fiscal Need Approach to Equalization," Canadian Public Policy, University of Toronto Press, vol. 22(2), pages 99-115, June.
  2. Tsui, Kai-yuen, 1996. "Economic reform and interprovincial inequalities in China," Journal of Development Economics, Elsevier, vol. 50(2), pages 353-368, August.
  3. Deininger, K & Squire, L, 1996. "Measuring Income Inequality : A New Data-Base," Papers 537, Harvard - Institute for International Development.
  4. Cukierman, Alex & Webb, Steven B & Neyapti, Bilin, 1992. "Measuring the Independence of Central Banks and Its Effect on Policy Outcomes," World Bank Economic Review, World Bank Group, vol. 6(3), pages 353-398, September.
  5. Prud'homme, Remy, 1995. "The Dangers of Decentralization," World Bank Research Observer, World Bank Group, vol. 10(2), pages 201-220, August.
  6. Landon, Stuart, 1999. "Education costs and institutional structure," Economics of Education Review, Elsevier, vol. 18(3), pages 327-345, June.
  7. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
  8. 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.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:2021. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.