Transcript Poor people Providers

Decentralization and
service delivery
The problem
• Disappointing health and education
outcomes, especially for poor people
Outcomes are worse for poor people
Deaths per 1000 births
Source: Analysis of Demographic and Health Survey data
Outcomes are worse for poor people
Percent aged 15 to 19 completing each grade or higher
Source: Analysis of Demographic and Health Survey data
The problem
• Disappointing health and education
outcomes, especially for poor people
• Increasing public spending is not
enough
Increasing public spending is not enough
* Percent deviation from rate predicted by GDP per capita
Source: Spending and GDP from World Development Indicators database. School completion from Bruns, Mingat and Rakatomalala 2003
Increasing public spending is not enough
* Percent deviation from rate predicted by GDP per capita
Source: Spending and GDP from World Development Indicators database. Under-5 mortality from Unicef 2002
The problem
• Disappointing health and education
outcomes, especially for poor people
• Increasing public spending is not
enough
• Services failing poor people at local
levels
The real problem for policy:
Services failing poor people
• Resources fail to reach frontline service
providers
– Bulky state administrations soak up bulk of the
resources
– Leakage: in Uganda, only 13 percent of nonwage recurrent spending on primary education
reached primary schools
– Mismanagement: in Nigeria, community health
workers often don’t get paid
The real problem for policy:
Services failing poor people
• Service quality is low for poor people
– Bangladesh: Absenteeism rates for doctors in
primary health care centers: 74 percent
– Zimbabwe: 13 percent of respondents gave as a
reason for not delivering babies in public
facilities that “nurses hit mothers during
delivery”
– Guinea: 70 percent of government drugs
disappeared
The solution: Decentralize?
• Increasing accountability for local services
• Decentralization to locally elected
governments—analyzing potential impact
within a framework of accountability
A framework of
relationships of accountability
Poor people
Providers
A framework of
relationships of accountability
Policymakers
Poor people
Providers
Mexico’s PRONASOL, 1989-94
• Large social assistance program
(1.2 percent of GDP)
• Water, sanitation, electricity and education
construction to poor communities
• Limited poverty impact
– Reduced poverty by 3 percent
– If better targeted, could have reduced it by
64 percent
PRONASOL expenditures according to
party in municipal government
Source: Estevez, Magaloni and Diaz-Cayeros 2002
A framework of
relationships of accountability
Policymakers
Poor people
Providers
Absence rate among teachers
Country
Ecuador
India
Indonesia
Papua New Guinea
Peru
Zambia
Uganda
Rate (percent)
16
25
18
15
13
17
26
Decentralized service delivery
National policymakers
Local policymakers
Poor people
Providers
Fiscal issues
National policymakers
Local policymakers
Poor people
Providers
Fiscal Issues
• Expenditure assignments
– Loss of economies of scale
– Concurrent responsibilities can lead to duplication,
confusion, and evasion
• Financing—tax assignments, intergovernmental
transfers, borrowing
– Soft budget constraints
– Tax inefficiencies and inequities
– Political distortions in resource distribution
Administrative responsibilities
National policymakers
Local policymakers
Poor people
Providers
Capacity constraints
National policymakers
Local policymakers
Poor people
Providers
Political issues
National policymakers
Local policymakers
Poor people
Providers
Political Issues
• Why do services fail poor people even in
democracies where politicians depend upon
their support to gain and remain in office?
• Political market imperfections
– Information constraints
– Social polarization
– Credibility of political promises
Do information problems
improve with decentralization?
• Voters better informed
about local public
goods
• Easier to monitor local
services
• Easier to coordinate
rewards/ punishments
when policy
dimensionality is
reduced
• In Uganda and the
Philippines, voters rely on
local social networks for
information about local
govts., and on national
newspapers for national
govts.
• In Nigeria, uncertainty
about fiscal resources
available to local govts.
• In India, voters hold state
governments responsible
for local services
Does social polarization reduce
with decentralization?
• Decentralized units
more homogeneous
• Some local
communities even
more polarized
(within-village
inequality in India
very high)
• Local elites find it
easier to mobilize and
“capture” public
resources
Does political credibility increase
with decentralization?
• Proximity and
reputation breed
credibility
• In young democracies,
politicians build
credibility by targeting
their “clients”
• Combination of social
polarization and young
democracy make local
politics particularly
“clientelistic”
Political Issues
• Why do services fail poor people even in
democracies where politicians depend upon
their support to gain and remain in office?
• Political market imperfections
– Information constraints
– Social polarization
– Credibility of political promises
• Political Institutions and Electoral Rules
Political Institutions and
Electoral Rules
• Non-pivotal/nonswing voters get
neglected under
centralization (Eg.
Bolivia)
• Lower barriers to
entry increases
political competition
• National political parties
determine objectives and
incentives of local
governments
• Proportional
representation and district
magnitude more
significant determinants of
service delivery incentives
Transition dilemmas
National policymakers
Local policymakers
Poor people
Providers
EDUCO Program in El Salvador
• Parents’ associations (ACEs)
– Hire and fire teachers
– Visit schools on regular basis
– Contract with Ministry of Education to
deliver primary education
EDUCO promoted
parental involvement…
Source: Adapted from Jimenez and Sawada 1999
…which boosts
student performance
Conclusion
• Services fail when accountability breaks
down
• Decentralization can overcome or
exacerbate accountability failures
• Institutional design should address political
market imperfections:
-- provide more relevant information
-- de-emphasize social polarization
-- build credibility for public services