SAGA Proposal: Decentralization

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SAGA Research Proposal:

1.2.4.1 Decentralization

Decentralization of public expenditures is an idea in vogue, though its actual application remains patchy in Africa. Too much of Africa’s education and health budgets are spent on central administration, too little on local services. In one celebrated study, Ablo and Reinikka (1998) found that local schools received only 20 percent of the non-wage education spending that was budgeted for them in Uganda in 1995.* If this is true more generally in Africa (a question worth studying), then there is great scope for improving quality by reapportioning funds from central bureaucracies to local institutions themselves. This is the goal of decentralization. Advocates argue that if the control of funds is closer to the end users, it is more likely that they will be used to provide quality services because it is easier to hold local officials accountable (Fuller and Rivarola 1999).

In practice, the record on decentralization has been mixed so far, in part because central governments have been more willing to devolve responsibilities (buy your own drugs; pay your teacher) than the corresponding budget (through revenue sharing, for example). Even if central governments permit the necessary budgetary reallocations, administrative capacity at the local level may be lacking. For example, weak local administration has seriously hampered the implementation of Madagascar’s ambitious plan to administer health services though 111 local health districts. But there are interesting successes. For example, in response to the Ablo and Reinikka study showing low share of resources that actually reached local schools, the government began to disseminate information both through the media and by posting public spending information at schools and district offices. In 1999/2000, the share of resources reaching local schools had risen to over 90 percent (although with delays), a remarkable improvement (Reinikka and Collier 2001).

* The funds were not misappropriated. They simply disappeared in administration costs.

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