London School of Economics EOPP: Economic Organisation and Public Policy Programme LSE
EOPP: Economic Organisation and Public Policy Programme

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Decentralization of Health and Education in Developing Countries: A Quality-Adjusted Review of the Empirical Literature

Anila Channa, Jean-Paul Faguet, July 2012
Paper No' EOPP 038: | Full paper (pdf)
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Keywords: Decentralization; School-Based Management, Education, Health, Service Delivery, Developing Countries, Preference Matching, Technical Efficiency

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This Paper is published under the following series: Economic Organisation and Public Policy Discussion Papers
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Abstract:

We review empirical evidence on the ability of decentralization to enhance preference matching and technical efficiency in the provision of health and education in developing countries. Many influential surveys have found that the empirical evidence of decentralization’s effects on service delivery is weak, incomplete and often contradictory. Our own unweighted reading of the literature concurs. But when we organize the evidence first by substantive theme, and then – crucially – by empirical quality and the credibility of its identification strategy, clear patterns emerge. Higher quality evidence indicates that decentralization increases technical efficiency across a variety of public services, from student test scores to infant mortality rates. Decentralization also improves preference matching in education, and can do so in health under certain conditions, although there is less evidence for both. We discuss individual studies in some detail. Weighting by quality is especially important when evidence informs policy-making. Firmer conclusions will require an increased focus on research design, and a deeper examination into the prerequisites and mechanisms of successful reforms.