Decentralisation and devolution to locally elected forms of government is often promoted as a means of: 1. giving local citizens and their representatives more decision-making power (political decentralisation); 2. redistributing authority, responsibilities and resources among different levels of government (administrative decentralisation); and 3. localising authority over raising revenues and decision-making in expenditures (fiscal decentralisation).
Evidence of the effectiveness of decentralisation on improving governance and social spending is limited. However, a number of factors have been identified as influencing local government’s capacity to improve social spending. These include:
- the institutional framework
- the interrelationship between political, administrative and fiscal decentralisation
- the relationship between revenue and expenditure, and the available sources of revenue
- the level of effective coordination between the different levels of government
- how the benefits of decentralisation are distributed across sub-national governments.
