Chapter 1 – IS DECENTRALIZATION GOOD FOR DEVELOPMENT?

Perspectives From Academics and Policymakers

Jean-Paul Faguet[1]   &   Caroline Pöschl[2]


Abstract

Decentralization research has become more quantitative and formal over the past two decades. But as technical rigor has increased, the focus of research has narrowed to decentralization’s effects on particular policy variables, leaving aside larger, more nuanced and complex questions of crucial importance to policymakers contemplating reform. This book seeks to return attention to issues like this that rank among policymakers’ first concerns, but are methodologically difficult to answer. We do this by marrying the insights and experience of senior policymakers involved in driving decentralization forward at the highest levels, with academics working at the forefront of the field in economics, politics, and development and policy studies. This chapter introduces the book by analyzing the following questions: Why do politicians decentralize in the first place?  How can reform be made politically feasible?  How can decentralization lead to improved development outcomes?  Do municipalities compete amongst themselves, and what effects might this have on public policy and services?  Will decentralization promote clientelism or broad-based development?  And finally, will decentralization strengthen or weaken  developing states?  The evidence presented in the book provides a firm basis for concrete answers to all of these questions, allied to specific policy advice for aspiring reformers.

References

Ahmad, E. and G. Brosio (Eds.). 2009. Does Decentralization Enhance Service Delivery and Poverty Reduction? Cheltenham: Edward Elgar.

Bardhan, P. and D. Mookherjee. 1998. “Expenditure Decentralization and the Delivery of Public Services in Developing Countries.” Working Paper No. C98-104. Berkeley: Center for International and Development Economics Research.

Bardhan, P. and D. Mookherjee. 1999. “Relative Capture of Local and Central Governments: An Essay in the Political Economy of Decentralization.” Berkeley: Manuscript.

Bardhan, P. and D. Mookherjee. (eds.). 2006. Decentralization and Local Governance in Developing Countries: A Comparative Perspective. Cambridge, MA: MIT Press.

Besley, T. and A. Case. 1995a. “Does Electoral Accountability Affect Economic Policy Choices?  Evidence from Gubernatorial Term Limits.” Quarterly Journal of Economics, 110:769-98.

Besley, T. and A. Case. 1995b. “Incumbent Behavior: Vote-Seeking, Tax-Setting, and Yardstick Competition.” American Economic Review, 85: 25-45.

Bird, R. M. and M. Smart. 2010. “Assigning State Taxes in a Federal Country: The Case of Australia,” in Melbourne Institute, Australia’s Future Tax and Transfer Policy Conference (Melbourne: Melbourne Institute of Applied Economic and Social Research, 2010), pp. 72-94.

Boone, P. and J.P. Faguet. 1998. “Multilateral Aid, Politics and Poverty: Past Failures and Future Challenges”, chapter 2 in R. Grant and J. Nijman (eds.). The Global Crisis in Foreign Aid, Syracuse: Syracuse University Press, 11-26.

Channa, A. and J.P. Faguet. 2012. “Decentralization of Health and Education in Developing Countries: A Quality-Adjusted Review of the Empirical Literature.”  LSE/STICERD Working Paper No. EOPP 38.

De Dios, E. S. 2007. Local politics and local economy, in: Balisacan, A.M.. Hill, H. (Eds.), The Dynamics of Regional Development: The Philippines in East Asia. Cheltenham, UK: Edward Elgar, 157-203.

Devarajan, S., S. Shah and S. Khemani. 2009. “The Politics of Partial Decentralization,” in E. Ahmad and G. Brosio (Eds.), Does Decentralization Enhance Service Delivery and Poverty Reduction? Cheltenham: Edward Elgar.

Faguet, J.P. 2014. “Decentralization and Governance.” World Development, 53: 2–13.

Faguet, J.P. 2014b. “Can Sub-National Autonomy Strengthen Democracy in Bolivia?” Publius: The Journal of Federalism, 44(1): 51-81. doi: 10.1093/publius/pjt020.

Faguet, J.P. 2012. Decentralization and Popular Democracy: Governance from Below in Bolivia. Ann Arbor: University of Michigan Press.

Faguet, J.P. 2004. “Why So Much Centralization? A Model of Primitive Centripetal Accumulation.”  STICERD DEDPS No.43, London School of Economics.

Faguet, J.P. 2000. “Decentralization and Local Government Performance: Improving Public Service Provision in Bolivia”, Revista de Economía del Rosario, 3(1): 127-176.

Faguet, J.P. and F. Sánchez. 2013. “Decentralization and Access to Social Services in Colombia.” Public Choice. DOI 10.1007/s11127-013-0077-7.

Faguet, J.P. and M. Shami. 2008. “Fiscal Policy and Spatial Inequality in Latin America and Beyond.”  World Bank Policy Research Working Paper.

Faguet, J.P. and F.B. Wietzke. 2006. “Social Funds and Decentralization: Optimal Institutional Design.” Public Administration and Development, 26(4): 303-315.

Green, E. 2011. “Decentralization and political opposition in contemporary Africa: evidence from Sudan and Ethiopia”. Democratization, 18:5, 1087-1105.

Hacker, J.S. and P. Pierson. 2010. Winner-Take-All Politics: How Washington Made the Rich Richer–and Turned Its Back on the Middle Class. New York: Simon & Schuster.

Hicken, A. 2011. “Clientelism.” Annual Review of Political Science, 14: 289-310. DOI: 10.1146/annurev.polisci.031908.220508

Klein, H. 1982. Bolivia – The Evolution of a Multi-ethnic Society. Oxford: Oxford University Press.

Klein, H. 1993. Historia de Bolivia. La Paz: Libreria-Editorial Juventud.

Manor, J. 1997. Lecture given at “Technical Consultation on Decentralization for Rural Development.” Rome, 16-18 December 1997.

Manor, J. 1999. The Political Economy of Democratic Decentralization. Washington, DC: The World Bank.

Montero, A. P., and Samuels, D. J. (Eds.). 2004. Decentralization and democracy in Latin America. Notre Dame, IN: University of Notre Dame Press.

Moore, M. 2007. “How Does Taxation Affect the Quality of Governance?”. IDS Working Paper 280. Brighton: Institute of Development Studies.

Ostrom, E., L. Schroeder and S. Wynne. 1993. Institutional Incentives and Sustainable Development: Infrastructure Policies in Perspective. Boulder: Westview Press.

Rao, M. G. and R. M. Bird. 2011. “Coping with Change: The Need to Restructure Urban Governance and Finance in India.” IMFG Paper No. 4, University of Toronto.

Rodden, J.A., G.S. Eskeland and J. Litvack. 2003. Fiscal Decentralization and the Challenge of Hard Budget Constraints. Cambridge, MA: MIT Press.

Sabatini, C. (2003). “Decentralization and Political Parties”. Journal of Democracy, 14(2): 138–50.

Treisman, D. 2007. The Architecture of Government: Rethinking Political Decentralization. New York: Cambridge University Press.

Wallis, J. J. and W. E. Oates. 1988. “Decentralization in the Public Sector an Empirical Study of State and Local Government.” In Fiscal Federalism Quantitative Studies, ed. H. Rosen. Chicago: University of Chicago Press.

Weingast, B.R. 1993. “Constitutions as Governance Structures.” Journal of Institutional and Theoretical Economics, 149:286-311.

Weingast, B.R. 1995. “The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development.” Journal of Law, Economics, & Organization, 11:1-31.

Wibbels, E. 2005. Federalism and the Market:  Intergovernmental Conflict and Economic Reform in the Developing World. Cambridge: Cambridge University Press.