Measuring Local Public Sector Finances: Getting the Bigger Picture

LPSI News: Posted May 10, 2012

There are two strong camps among researchers and policy practitioners of decentralization: those who strongly believe in the potential benefits of decentralization and local governance, and those who see decentralization as a road filled with pitfalls and hazards. Despite considerable efforts, the empirical literature remains inconclusive as to which view is right: while there is no evidence that the decentralization of powers and resources to elected subnational governments results in greater economic growth or improved public service delivery, there is no evidence to the contrary either.

Until recently, however, the policy debate, data methodologies and the empirical research surrounding decentralized local governance have focused almost exclusively on the role and effectiveness of elected (devolved) local governments in developing countries. Funds devolved through local governments constitute only a share of the local public sector. A substantial part of local service delivery is through centralized or deconcentrated arms of line departments. The overall discussion on decentralization does not take this into account. Much less attention has been paid to the effectiveness or ineffectiveness of the public sector in deconcentrated countries, or in countries that rely on centralized mechanisms for delivering public services. Despite the fact that roughly half of the countries around the world deliver public services predominantly in a non-devolved manner, little or nothing is systematically known about the nature of the local public sector in these countries.

An objective analysis of the local public sector should acknowledge that there are different approaches by which governments interact with —and deliver services to— the people. Indeed, central authorities in most countries simultaneously rely on a combination of devolution, deconcentration and other mechanisms to deliver public services and interact with the public. Enhancing our collective understanding of the local public sector requires a comparison of local public sector institutions and finances across different countries using a framework that can be applied regardless of the governance structure of a country's public sector. This is the objective of the Urban Institute's Local Public Sector Initiative (LPSI). Based on a methodology developed by LPSI, the initial comparative analysis of the size and composition of the local public sectors in Afghanistan, Bangladesh, Cambodia, Egypt, Mozambique, Nepal, Nigeria, South Africa, Tanzania, and Uganda will be presented.

Jamie Boex is a Senior Research Associate with the Urban Institute Center on International Development and Governance. He works on fiscal decentralization, subnational governance and fiscal policy reforms in developing and transition countries around the world. He has worked for the World Bank, USAID, UNDP, and other bilateral development agencies and contributed to policy reforms in twenty countries. He has authored and contributed to numerous books, book chapters, articles, and reports on intergovernmental finance (fiscal decentralization), public expenditure management, and poverty reduction.

Presenter: Jamie Boex, Urban Institute Center on International Development and Governance
Chair: Victor Vergara, Sector Leader, EASIN
Discussants: Roland White, Lead Urban Specialist, AFTUW
Bala Menon, Senior Urban Specialist, SASDU (TBC)
Thursday, May 17, 12:30 - 2:00 PM, MC 5-100.

The presentation is at the Main Complex of the World Bank, 1818 H Street N.W. For a visitor's pass or more information, please contact Tara Sharafudeen at

The AusAID- World Bank South Asia Decentralization Series is a knowledge space on decentralization. The partnership with AusAID the development arm of the Australian government has through the Policy Facility for Decentralization, Local Governance and Service Delivery supported major analytical and operational work around decentralization, local governance and service delivery in South Asia. The 86 presentations since the series commenced in April 2003, have been attended by 4,756 staff from various networks and regions and by guests from development partners and think tanks.