Does Decentralization Increase Responsiveness to Local Needs? Evidence from Bolivia
Author(s)
Faguet, Jean-PaulKeywords
EXECUTIVE AGENCIESMINISTRY OF FINANCE
PUBLIC HEALTH
CORRUPTION
SOCIAL SECTORS
EXPENDITURE
MUNICIPALITIES
INEFFICIENCY
DEMOCRATIC SYSTEMS
SOCIAL PACT
BUREAUCRACY
ECONOMIC INCENTIVES
AUTHORITY
CONSENSUS
GOVERNMENT RESOURCES
ACCOUNTABILITY
ECONOMISTS
PRIVATIZATION OF STATE
PUBLIC INVESTMENT
DEVELOPMENT STRATEGY
CENTRAL AGENCIES
REVOLUTION
PUBLIC EXPENDITURE
TAX REVENUES
NATIONAL TERRITORY
EXOGENOUS VARIABLES
MERIT GOOD
EQUILIBRIUM
PUBLIC SERVICE PROVISION
POLITICIANS
AGRICULTURE
UPPER HOUSE
DECONCENTRATION
UNDERESTIMATES
FINANCIAL SUPPORT
CITIES
ADMINISTRATIVE CAPACITY
URBAN DEVELOPMENT
PUBLIC GOOD
FOREIGN INVESTMENT
PRIVATIZATION
MANAGERIAL EFFICIENCY
DEVOLUTION
ACCOUNTING
ADMINISTRATIVE CAPABILITY
ECONOMIES OF SCALE
LEGISLATURES
ECONOMIC PERFORMANCE
INCOME
SOCIAL WELFARE
FISCAL
DEMOCRATIC REGIMES
PUBLIC GOODS
INSTITUTIONAL CAPACITY
DECENTRALIZATION
MUNICIPALITY
PUBLIC FUNDS
TAXATION
CAPITALS
PUBLIC SERVICES
REPRESENTATIVES
DISTRICTS
MORAL HAZARD
FISCAL DECENTRALIZATION
CITIZENS
VOTERS
PUBLIC SERVICE
PRIVATE GOODS
SEPARATION OF POWERS
LOCAL GOVERNMENT
REVENUE SHARING
ECONOMIC GROWTH
UTILITY FUNCTIONS
TRANSPORT
PUBLIC ADMINISTRATION
MUNICIPAL GOVERNMENT
COUNCILS
POLICY INSTRUMENTS
CENTRAL GOVERNMENT
EMPLOYMENT
ELECTED REPRESENTATIVES
CENTRAL GOVERNMENTS
MUNICIPAL GOVERNMENTS
LOCAL GOVERNMENTS
PUBLIC SECTOR
DECENTRALIZATION REFORM
TRADITIONAL ECONOMIES
DEVELOPMENT STRATEGIES
POLITICAL POWER
EXTERNALITIES
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Show full item recordOnline Access
http://hdl.handle.net/10986/19723Abstract
Significant changes in public investment patterns - in both the sectoral uses of funds, and their geographic distribution - emerged after Bolivia devolved substantial resources from central agencies, to municipalities in 1994. By far the most important determinant of these changes are objective indicators of social need (for example, education investment rises where illiteracy is higher). Indicators of institutional capacity, and social organization are less important. Empirical tests using a unique database show that investment changed significantly in education, agriculture, urban development, water management, water and sanitation, and possibly health. These results are robust, and insensitive to specification. As the smallest, poorest municipalities invested newly devolved public funds in their highest priority projects, investment showed a strong, positive relationship with need in agriculture, and the social sectors. In sectors where decentralization did not bring about changes, the central government had invested little before a994, and the local government continued to invest little afterward. These findings are consistent with a model of public investment, in which local government's superior knowledge of local needs, dominates the central government's technical, and organizational advantage in the provision of public services.Date
2001-01Identifier
oai:openknowledge.worldbank.org:10986/19723http://hdl.handle.net/10986/19723
Copyright/License
http://creativecommons.org/licenses/by/3.0/igo/Related items
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