Decentralization and Citizen Participation

1. Decentralization and Citizen Participation January 29, 2009

2. What is decentralization? • Modes of decentralization • Administrative • Fiscal • Political • Forms of decentralization • Deconcentration • Devolution • Delegation • Two views of decentralization • Technocratic • Communitarian

3. Hypotheses about conditions for decentralization • Bardhan • People can ‘vote with their feet’ • Money reaches lower levels • No need for targeting • No capacity issues • No elite capture When is decentralization appropriate? • When preferences differ among citizens • When there are ‘spillovers’ among jurisdictions • When coordination costs among agents (citizens) are high • When there is a supporting finance mechanism?

4. Other preconditions for effective decentralization • Heller • High degree of state capacity • Well-developed civil society • Political party with social movement characteristics that BENEFITS from decentralization • Mechanisms to resist local elite capture

8. What matters for decentralization(Bardhan) • Heterogeneity of agents • Spillovers between jurisdictions • Coordination costs among agents • Can they hold local officials accountable? • Financing mechanism • Potential for capture by local elites

9. Insights from Uganda Case • Increasing local taxes has had pernicious effects on the poor • No effective mechanism to incorporate local planning into district plans • Competition between elected officials and civil servants • New forms of patronage can be created by decentralization

10. Olken – Study of Corruption in KDP • Randomly assign villages to be subject to audit • Randomly assign two levels of participation • Invitations to attend village meetings widely distributed • Invitations + anonymous comment forms distributed • Measure Corruption • Usual method: perceptions, or ask about bribe paying

11. Participation • Being in a participation group does not significantly affect overall corruption • With or without comment forms • But invitations reduced missing money on wages more than on materials • Villages with invitations did more openly discuss corruption at meetings • Villages with comments were more likely to take action • Missing money was lower were comments were distributed through schools (rather than having politicians involved)

12. Corruption measure • Take ‘core’ samples from roads and public works • Interview villagers about effective wage rates • Estimate losses due to corruptoin • Findings: • Being in audit group reduces corruption by 8% • But number of awards to family members increases

13. Analytic Frameworks for Assignment • Pritchett and Woolcock • Discretionary v. transaction intensive nature of services • Eight alternatives for provision • Grindle • Klitgaard • World Bank • Hypotheses about decentralization

14. Grindle – Assessing Governance Interventions • How much conflict is likely? • How much time is required to institutionalize? • How organizationally complex? • Logistically complex? • Expensive? • How much behavioral change is required • And, for what benefit?

15. Evaluating Potential Governance Interventions (Grindle) Is intervention appropriate for state capacity? • What degree of conflict is likely • Time required for institutionalization • Organizational complexity • Budgetary requirements • Amount of behavioral change required

16. Pritchett & Woolcock • Effective provision depends on structure of incentives • Resources • Information • Decision-making • Delivery mechanism • Accountability

17. Klitgaard • C = M + D – A • Strategies: • Obtain information • Set rewards and penalties • Change accountability relationships • Induce competition • Limit discretion • Divide up large tasks