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Decentralization and service delivery

  • Ahmad, Junaid
  • Devarajan, Shantayanan
  • Khemani, Stuti
  • Shah, Shekhar

Dissatisfied with centralized approaches to delivering local public services, a large number of countries are decentralizing responsibility for these services to lower-level, locally elected governments. The results have been mixed. The paper provides a framework for evaluating the benefits and costs, in terms of service delivery, of different approaches to decentralization, based on relationships of accountability between different actors in the delivery chain. Moving from a model of central provision to that of decentralization to local governments introduces a new relationship of accountability-between national and local policymakers-while altering existing relationships, such as that between citizens and elected politicians. Only by examining how these relationships change can we understand why decentralization can, and sometimes cannot, lead to better service delivery. In particular, the various instruments of decentralization-fiscal, administrative, regulatory, market, and financial-can affect the incentives facing service providers, even though they relate only to local policymakers. Likewise, and perhaps more significantly, the incentives facing local and national politicians can have a profound effect on the provision of local services. Finally, the process of implementing decentralization can be as important as the design of the system in influencing service delivery outcomes.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3603.

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Date of creation: 01 May 2005
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Handle: RePEc:wbk:wbrwps:3603
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  1. Stuti Khemani, 2006. "Local Government Accountability for Health Service Delivery in Nigeria," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(2), pages 285-312, June.
  2. Robert P. Inman, 1992. "Can Philadelphia escape its fiscal crisis with another tax increase?," Business Review, Federal Reserve Bank of Philadelphia, issue Sep, pages 5-20.
  3. Khemani, Stuti, 2001. "Decentralization and accountability : are voters more vigilant in local than in national elections ?," Policy Research Working Paper Series 2557, The World Bank.
  4. Khemani, Stuti, 2007. "Does delegation of fiscal policy to an independent agency make a difference? Evidence from intergovernmental transfers in India," Journal of Development Economics, Elsevier, vol. 82(2), pages 464-484, March.
  5. Reinikka, Ritva & Svensson, Jakob, 2001. "Explaining Leakage of Public Funds," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  6. Filmer, Deon & Hammer, Jeffrey S & Pritchett, Lant H, 2000. "Weak Links in the Chain: A Diagnosis of Health Policy in Poor Countries," World Bank Research Observer, World Bank Group, vol. 15(2), pages 199-224, August.
  7. Filmer, Deon & Pritchett, Lant, 1999. "The impact of public spending on health: does money matter?," Social Science & Medicine, Elsevier, vol. 49(10), pages 1309-1323, November.
  8. John Akin & Paul Hutchinson & Koleman Strumpf, 2005. "Decentralisation and government provision of public goods: The public health sector in Uganda," Journal of Development Studies, Taylor & Francis Journals, vol. 41(8), pages 1417-1443.
  9. Ghazala Mansuri, 2004. "Community-Based and -Driven Development: A Critical Review," World Bank Research Observer, World Bank Group, vol. 19(1), pages 1-39.
  10. Deon Filmer & Lant Pritchett, 1999. "The Effect of Household Wealth on Educational Attainment: Evidence from 35 Countries," Population and Development Review, The Population Council, Inc., vol. 25(1), pages 85-120.
  11. Faguet, Jean-Paul, 2001. "Does decentralization increase responsiveness to local needs? - evidence from Bolivia," Policy Research Working Paper Series 2516, The World Bank.
  12. Hamid Davoodi & Heng-fu Zou, 1996. "Fiscal Decentralization and Economic Growth: A Cross-Country Study," CEMA Working Papers 98, China Economics and Management Academy, Central University of Finance and Economics.
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