Decentralization and Accountability in Infrastructure Delivery in Developing Countries

We examine implications of delegating delivery of an infrastructure service to an elected local government rather than bureaucrats appointed by a central government. The latter is uninformed about local need and unable to monitor service allocations. Bureaucrats charge bribes for services as monopoly providers, resulting in underprovision of services, especially for the poor. Local governments are directly responsive to their citizens needs but may be subject to capture by elites. Effects of decentralization on service volumes, efficiency and equity are analyzed under different financing arrangements for local governments.