Studies in Fiscal Federalism and State–local Finance series
Edited by Ehtisham Ahmad and Giorgio Brosio
Chapter 1: Does Decentralization Enhance Service Delivery and Poverty Reduction?
Ehtisham Ahmad and Giorgio Brosio 1 MOTIVATION Does decentralization enhance service delivery and poverty reduction? This is a fundamental question facing policy-makers in developing as well as advanced countries. It is equally important for international agencies as well as bilateral donors, seeking to provide resources and advice that effectively support poverty reduction. This volume builds on the insights of the recent developments in the intergovernmental literature, reviewed in the Handbook of Fiscal Federalism1 (hereafter Handbook). We also present some new empirical evidence from different parts of the world, which have built on both efficiency and distributional aspects stressed in the Handbook. In this volume, we first present a set of policy-oriented papers that take further the discussion of aspects of the literature on fiscal federalism that have a bearing on the evaluation of the effectiveness of decentralized service delivery. We also present a set of careful empirical evaluations of the decentralization process in different parts of the world. Some, including the United Nations Development Programme-sponsored study of the decentralization of education and health care in Poland, and those on Bolivia and Uganda, were commissioned to focus on the political economy process and the outcomes of the decentralization process, specifically building on the insights from the Handbook. 2 2.1 THE ISSUES Trends in the Practice of Decentralization and Federalism Most countries have experimented with variants of decentralization reforms in the last three decades, addressing different motivations for decentralization. A few have embarked on ambitious decentralization 1 2 Does decentralization enhance service...
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