This report assesses the effectiveness of Bank support for decentralization between fiscal 1990 and 2007 in 20 countries, seeking to inform the design and implementation of future support. Given the difficulties of measuring the results of decentralization, the evaluation used intermediate outcome indicators—such as strengthened legal and regulatory frameworks for intergovernmental relations, improved administrative capacity, and increased accountability of subnational governments and functionaries to higher levels of government and to citizens—to assess the results of Bank support in these 20 countries.
To examine potential lessons at a sectoral level, the evaluation also assessed whether Bank support for decentralization improved intermediate outcomes for service delivery in the education sector in 6 of the 20 countries. Bank support contributed to more effective decentralization—substantially in more than one-third of the 20 cases and modestly in the others.
The most successful aspects of Bank support pertained to the legal frameworks for intergovernmental relations, the frameworks for intergovernmental fiscal transfers, and subnational financial management. Bank support was less effective in clarifying the roles and responsibilities of different levels of government and in improving own-source revenue mobilization by subnational governments. This was often a result of lack of political will.
Other things being equal, Bank support brought better results where there was consensus around the reform within the country prior to Bank engagement and when the support was combined with incentives for institutional reform at the subnational level. Looking forward, the results of Bank support for decentralization can be strengthened with more timely and coordinated analytical work to underpin it, by better coordinating fragmented sector-by-sector interventions, and by accompanying support for policy reform with technical assistance to strengthen local government capacity.
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