january 29, 2009. what is decentralization? modes of decentralization administrative fiscal...

Decentralization and Citizen Participation

January 29, 2009

What is decentralization?Modes of decentralization

AdministrativeFiscalPolitical

Forms of decentralizationDeconcentrationDevolutionDelegation

Two views of decentralizationTechnocraticCommunitarian

Hypotheses about conditions for decentralizationBardhan

People can ‘vote with their feet’Money reaches lower levelsNo need for targetingNo capacity issuesNo elite capture

When is decentralization appropriate?When preferences differ among citizensWhen there are ‘spillovers’ among jurisdictionsWhen coordination costs among agents (citizens)

are highWhen there is a supporting finance mechanism?

Other preconditions for effective decentralizationHeller

High degree of state capacityWell-developed civil societyPolitical party with social movement

characteristics that BENEFITS from decentralization

Mechanisms to resist local elite capture

What matters for decentralization(Bardhan)Heterogeneity of agentsSpillovers between jurisdictions Coordination costs among agents

Can they hold local officials accountable?Financing mechanismPotential for capture by local elites

Insights from Uganda CaseIncreasing local taxes has had pernicious

effects on the poor No effective mechanism to incorporate local

planning into district plansCompetition between elected officials and

civil servantsNew forms of patronage can be created by

decentralization

Olken – Study of Corruption in KDPRandomly assign villages to be subject to

auditRandomly assign two levels of participation

Invitations to attend village meetings widely distributed

Invitations + anonymous comment forms distributed

Measure CorruptionUsual method: perceptions, or ask about bribe

paying

ParticipationBeing in a participation group does not

significantly affect overall corruptionWith or without comment formsBut invitations reduced missing money on wages

more than on materialsVillages with invitations did more openly discuss

corruption at meetingsVillages with comments were more likely to take

action Missing money was lower were comments were

distributed through schools (rather than having politicians involved)

Corruption measureTake ‘core’ samples from roads and public

worksInterview villagers about effective wage ratesEstimate losses due to corruptoin

Findings:• Being in audit group reduces corruption by 8%• But number of awards to family members

increases

Analytic Frameworks for AssignmentPritchett and Woolcock

Discretionary v. transaction intensive nature of services

Eight alternatives for provisionGrindle KlitgaardWorld BankHypotheses about decentralization

Grindle – Assessing Governance InterventionsHow much conflict is likely?How much time is required to

institutionalize?How organizationally complex?Logistically complex?Expensive?How much behavioral change is requiredAnd, for what benefit?

Evaluating Potential Governance Interventions (Grindle)

Is intervention appropriate for state capacity?

What degree of conflict is likelyTime required for institutionalizationOrganizational complexityBudgetary requirementsAmount of behavioral change required

Pritchett & WoolcockEffective provision depends on structure of

incentivesResourcesInformationDecision-makingDelivery mechanismAccountability

KlitgaardC = M + D – AStrategies:

Obtain informationSet rewards and penaltiesChange accountability relationshipsInduce competitionLimit discretionDivide up large tasks