In recent years, developing countries have decentralized functions and responsibilities for service delivery to lower levels of government at an increasing pace. The main reasons for such reforms are often political, but governments adopt them also as a way to improve service delivery and local governance. Typically, after the political decision is made, a country will turn to its development partners— including the World Bank— for support in implementing the new policies and achieving their development objectives.
Bank support contributed to more effective decentralization— substantially in more than one-third of 20 country cases studied for this evaluation and modestly in others. The most successful aspects of Bank support pertained to the legal frameworks for intergovernmental relations, the frameworks for intergovernmental fiscal transfers, and subnational financial management. Bank support was less effective in clarifying the roles and responsibilities of different levels of government and in improving own-source revenue mobilization by subnational governments, often due to lack of political will.
Other things being equal, Bank support brought better results where there was consensus around the reform within the country prior to Bank engagement and when the support was combined with incentives for institutional reform at the subnational level.
Looking forward, the results of Bank support for decentralization can be strengthened with more timely and coordinated analytical work to underpin it, by better coordinating fragmented sector-by-sector interventions, and by accompanying support for policy reform with technical assistance to strengthen local government capacity. Download the Report - English Executive Summary -English |Français
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IEG assessed the effectiveness of Bank support for decentralization between fiscal 90 and 2007 in 20 countries, seeking to inform the design and implementation of future support. Given the difficulties of measuring the results of decentralization, the evaluation used intermediate outcome indicators— such as strengthened legal and regulatory frameworks for intergovernmental relations, improved administrative capacity, and increased accountability of subnational governments and functionaries to higher levels of government and to local citizens— to assess the results of Bank support in these 20 cases. To examine potential lessons at a sectoral level, the evaluation also assessed whether Bank support for decentralization improved intermediate outcomes for service delivery in the education sector in 6 of the 20 countries. |
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| Findings | Recommendations |  | These recommendations are applicable to every client country for which the Bank has made a de facto strategic decision to support decentralization and sub-national government capacity development, through a cross-cutting or a sector-specific approach: - Ensure that Bank support, particularly lending, is underpinned by genuine client commitment to decentralized service delivery, given its importance to the success of Bank interventions. Occasionally, a role for the Bank may be justified in the absence of client commitment (e.g., to forestall potentially adverse measures), although the evaluation finds that Bank interventions under such circumstances are not usually effective.
- Encourage the adoption of a more results-based approach to decentralization by helping develop in-country and Bank capacity for monitoring and evaluation that focuses on local outcomes (such as enhanced accountability, greater citizen participation, and improved service delivery) rather than on just the process of decentralization.
- Ensure that Bank support at the country level is —
 Â Founded upon a clear analytical framework based on an integrative understanding of economic, political, and institutional factors at different levels of government and across sectors affected by decentralization
 Accompanied by support (from the Bank or others) to develop and maintain local government capacity to the extent feasible.
- Strengthen institutional arrangements within the Bank to ensure that an integrative view underpins Bank interventions, particularly those based on sector-specific entry points.
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