Does Decentralization Enhance Service Delivery and Poverty Reduction?
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Does Decentralization Enhance Service Delivery and Poverty Reduction?

  • Studies in Fiscal Federalism and State–local Finance series

Edited by Ehtisham Ahmad and Giorgio Brosio

Does decentralization enhance service delivery and poverty reduction? Drawing on cutting edge research, expert contributors address this fundamental question facing policy-makers in developing as well as advanced countries. This timely book builds upon insights on the recent developments in the intergovernmental literature first outlined in the Handbook of Fiscal Federalism. New empirical evidence from across the globe is presented: policy-oriented chapters evaluate fiscal federalism with an emphasis on the effectiveness of decentralized service delivery, the decentralization process in different parts of the world is appraised, and specially commissioned research focuses on the political economy process and the outcomes of the decentralization process. The role of international agencies, as explicit donors, is examined in several chapters.
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Chapter 6: What Do We Know? Evidence on Decentralization and Local Service Provision

Ehtisham Ahmad and Giorgio Brosio

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6. What do we know? Evidence on decentralization and local service provision Ehtisham Ahmad and Giorgio Brosio INTRODUCTION 1 What do we know about the results of decentralized service delivery? Verifying outcomes and results of decentralized policies is a very challenging exercise, given the large number of stakeholders involved. It is understandable that bilateral aid agencies and donors that have recommended decentralization have also stressed the importance of verifying outcomes of decentralized public policies. However, this is quite difficult to achieve in practice, especially in the developing country context. Only the more advanced OECD countries have moved effectively in this direction on a standardized basis, using the tools of performance budgeting (for example, the UK—whereas France is the latest to do so). An approximation may be attempted to evaluate outcomes in the absence of a performance budgeting framework, but this requires the definition of a proper methodology that is common among jurisdictions and levels of government, and using information that may not be readily available. Consequently, the emerging empirical literature on the outcomes of decentralization is heavily focused on OECD countries, and particularly on the efficiency considerations of service delivery (see Ahmad, Brosio and Tanzi, 2008). Efficiency in decentralized provision is a focal concern for economists and it should be also for citizens, but it is not always the main goal of decentralization. There are distinctive themes concerning decentralized service delivery in different parts of the world. In the developing world, the issue of poverty reduction at the local...

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