In theory, decentralised services respond better than highly centralised systems to diverse local needs. They may also be more efficient and encourage local accountability. In practice, however, challenges at the local level, such as weak incentives and limited financial resources, mean decentralisation may not automatically improve services. Some argue political decentralisation needs to be combined with fiscal decentralisation to strengthen the incentives of local governments to provide better pro-poor service delivery. Evidence of the effects of decentralisation on preference matching, technical efficiency and equity in services so far remains inconclusive.
Channa, A., & Faguet, J.-P. (2012). Decentralization of health and education in developing countries: a quality-adjusted review of the empirical literature. (Economic organisation and public policy discussion paper EOPP 38). London: STICERD.
Many influential surveys have found that the empirical evidence of decentralization’s effects on service delivery is weak, incomplete and often contradictory. This review finds that higher quality evidence indicates that decentralization increases technical efficiency across a variety of public services, from student test scores to infant mortality rates. Decentralization also improves preference matching in education, and can do so in health under certain conditions, although there is less evidence for both.
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Skoufias, E. et al. (2011). Electoral Accountability, Fiscal Decentralization and Service Delivery in Indonesia (Policy research working paper 5614). Washington: D. C.: World Bank.
How does the introduction of local elections affect the pattern of public spending and revenue generation at the local level? This article analyses how institutional design for electoral accountability affects public sector spending choices and service delivery in districts of Indonesia. It finds that electoral reforms had positive effects on expenditures, mainly due to expenditures brought about by the election of non-incumbents.
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Robinson, M. (2007). Does Decentralisation Improve Equity and Efficiency in Public Service Delivery Provision? IDS Bulletin, 38(1), 7-17.
To what extent does decentralisation produce improvements in service delivery for the poor? This paper argues that political and institutional decentralisation does not currently contribute to increases in either equity or efficiency. However, a poor record on service delivery so far does not rule out scope for improvement. The challenge for proponents of democratic decentralisation is to specify methods by which equity and efficiency can be achieved under decentralised forms of service delivery.
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Ahmad, E., Brosio, G., & Gonzalez, M. (2009). Uganda: managing more effective decentralization. In E. Ahmad and G. Brosio (Eds.), Does Decentralization Enhance Service Delivery and Poverty Reduction? (pp. 192-222). Cheltenham: Edward Elgar.
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For further resources on decentralisation, please see the GSDRC Topic Guide on Decentralisation and Local Government.