There is growing recognition that, despite significant increases in resourcing, public service delivery is still failing in many developing countries. Political and governance factors may offer at least part of the explanation.
A stronger evidence base is needed to address these factors, with greater cross-country analysis that identifies some of the most common political economy constraints and incentive problems, and draws out lessons for how they can be overcome.
To contribute to this evidence base, this review explores the existing evidence in three sectors (education, health, water and sanitation) across multiple countries. The review points to a set of five common political economy constraints and incentive problems that seem to affect levels of performance. These are:
- Political market imperfections, in terms of disruptions in the relationships between politicians and citizens. These include a lack of credibility in the political promises politicians make to citizens, a lack of information among voters about politicians’ performance, and forms of social fragmentation among voters (often manifested as identity politics).
- Policy incoherence, or contradictions (both within and across sectors) in policy design, structure and roles causing some part or the entirety of policy design to become unimplementable or unimplemented. This can be horizontal, with overlapping mandates and confused responsibilities among co-providers and other public bodies, or vertical, where policies do not have clear implementation plans or funding.
- Lack of effective performance oversight, where formal processes for monitoring and supervision are not followed or enforced and informal processes are insufficient. This includes cases where monitoring and supervision processes are not clearly defined or understood. Crucially, this includes both top-down monitoring and forms of bottom-up monitoring or supervision.
- Collective action challenges, which result in groups failing to act in their collective self-interest, even where individual members stand to benefit if the group achieves its objectives. This is particularly relevant for the effective delivery of public services, which often requires contributions from multiple actors, including frontline providers, service users, local and central government authorities, non-state actors and others.
- Moral hazard, in which actors are protected in some way from the risks associated with their actions or inaction. The study findings suggest it is necessary to pay particular attention to cases where the availability of aid or other resources (e.g. derived from natural resources) reduces incentives to develop service delivery systems over the long term.
