Understanding decentralisation:theory, evidence, and practice

What is decentralisation, what is its underpinning rationale, and why might it matter for development? This chapter reviews five decades of research on decentralisation and has three overarching objectives: a. to understand what decentralisation is, what it is not, and connect conceptual ambiguities in the literature to the mixed and inconclusive results that for so long plagued it; b. to distil an enormous literature on international experiences of decentralisation into clear empirical conclusions; and c. to derive policy lessons for countries considering decentralisation on how best to assign power over expenditures and responsibility for service provision, and also authority over taxation, among different levels of government. I propose a concise definition of decentralisation that is both conceptually clear and empirically tractable, and review empirical evidence on decentralisation’s ability to overcome some of the key obstacles holding back development.