Public Sector Decentralization

This paper is addressed to a broad audience of development professionals who are interested in both the substance of decentralisation issues and their impact on economic development. The paper summarises experience with alternative decentralisation arrangements and suggests a new analytical framework for assessing the impact of such arrangements on the performance of economic development programmes and projects. Consideration of alternative forms of decentralisation reveals the need to clarify and establish priorities among economic and political objectives. The potential for conflict among multiple objectives and the need to assess decentralisation policies in terms of acceptable trade-offs among those objectives summarises the importance of this paper.

Over recent decades, decentralization has emerged as a key Public Sector Reform strategy in a wide variety of international contexts. Yet, despite its emergence as a ubiquitous activity that cuts across disciplinary lines in international development, decentralization is understood and applied in many different ways by parties acting from contrary perspectives. This book offers a fascinating insight into theory and practice surrounding decentralization activities in the Public Sectors of developing and transitional countries. In drawing on the expertise of established scholars, the book explores the contexts, achievements, progress and challenges of decentralization and local governance. Notably, the contributions contained in this book are genuinely international in nature; the chapters explore aspects of decentralization and local governance in contexts as diverse as Ghana, Hong Kong, India, Indonesia, Kazakhstan, Morocco, Tanzania, Uganda, and Viet Nam. In summary, by examining the subject of decentralization with reference to specific developing and transitional Public Sector contexts in which it has been practiced, this book offers an excellent contribution towards a better understanding of the theory and practice of decentralization and local governance in international settings. This book was published as a special double issue of the International Journal of Public Administration.

This paper examines the importance of fiscal autonomy in the analysis of decentralization. Using new data published by the OECD (2001 and 2002), it reproduces several indicators and proposes new measures of decentralization that take into consideration subnational governments' autonomy over their revenues. Two models are reproduced: Davoodi and Zou (1998) on decentralization and economic growth, and Oates (1985), on decentralization and public sector size. Some evidence suggests that fiscal autonomy positively affects economic growth. Also, it seems to affect the size of the state, but evidence on this relation is limited. Despite some statistical weaknesses, there are sufficient indications to argue that subnational governments' fiscal autonomy should be a major concern when measuring decentralization. This paper - a product of the Poverty Reduction and Economic Management Division, World Bank Institute - is part of a larger effort in the institute to take a critical look at the nature and implications of measuring the fiscal dimension of decentralization.

Managing Public Services: Competition and Decentralization is intended for public sector managers to help them assess their situation and assist them to think creatively about different approaches for the future. The book begins on the general principle that business is good and bureaucracy is bad. This topic is followed by detailed studies of organizations, whether these are in a competitive environment, victims of market rhetoric, or in another competitive spectrum. Public sector managers are then encouraged to analyze their own organizations so appropriate actions can be applied into their situation. The extent to which competition is happening is explained, and if competition does not work well, then the concept of decentralization may be adopted. To what extent decentralization can then be used to increase the motivation and commitment of their employees is explained. The authors believe that new ways and methods of working will follow. But, any successes of these changes have to be measured by an important gauge: the impact upon the recipients of the new and improved services. In any undertaking, failures are bound to happen, and the authors suggest that public sector managers should be more tolerant. Finally, the book notes that to achieve delivery of quality service, whether these are for customers or clients, an important approach to managerial action is the design towards a good experience. Public administrators, heads and CEOs of public institutions and private firms, professors and students in public administration, policymakers, and sociologists will find this book valuable.