This book offers insights and lessons that help us understand when the answer is “Yes”, and when it is “No”. It shows us how decentralisation can be designed to drive development forward, and focuses attention on how institutional incentives can be created for governments to improve public sector performance and strengthen economies in ways that enhance citizen well-being. It also draws attention to the political motives behind decentralisation reforms and how these shape the institutions that result. The book's purpose is to marry policy makers’ detailed knowledge and insights about real reform processes with academics’ conceptual clarity and analytical rigor. This synthesis naturally shifts the analysis towards deeper questions of decentralization, stability and the strength of the State. The book explores these in Part 1, with deep studies of the effects of reform on state capacity, political and fiscal stability, and democratic inclusiveness in Bolivia, Pakistan, India, and Latin America more broadly. These complex questions—crucially important to policy makers but difficult to address with statistics—yield before a multipronged attack of quantitative and qualitative evidence combined with deep practitioner insight. How should reformers design decentralisation? Part 2 examines these issues with evidence from four decades of reform in developing and developed countries. What happens after reform is implemented? Decentralization and Local Service Provision turns to decentralization’s effects on health and education services, anti-poverty programs, etc. with original evidence from twelve countries across Africa, Asia, and Latin America.

A trend towards decentralized systems of government and the strengthening of subnational governance is underway globally. However, decentralization has many different meanings, and it is frequently left undefined, even while it is being implemented. This chapter argues that enhanced understanding of concepts and theories can contribute to improved practice during decentralization reforms, and consequently be of benefit both to governments and their citizens. Drawing on the theoretical, research and public administration literature, an approach is adopted that aims to inform decentralization praxis, that is, the interplay of policy, strategy, implementation and review. The material is used as a foundation for presenting a synthesis-framework for praxis that draws attention to: appreciating the theoretical scope of fiscal decentralization; focusing on the country and its goals; considering the design of the system of multi-level governance; focusing on central and local capacity; and adopting flexibility, supported by feedback mechanisms, in the process of decentralization.

We review recent evidence regarding decentralization and state strength and argue that decentralization can deepen democracy without compromising state strength if adequately designed. We examine how decentralization affects five key aspects of state strength: 1) Authority over territory and people, 2) Conflict prevention, 3) Policy autonomy and the ability to uphold the law, 4) Responsive, accountable service provision, and 5) Social learning. We provide specific reform paths that should lead to strengthening in each. Decentralizing below the level of social cleavages should drain secessionist pressure by peeling away moderate citizens from radical leaders. The regional specificity of elite interests is key. If regional elites have more to lose than gain from national schism, they will not invest in politicians and conflicts that promote secession. Strong accountability mechanisms and national safeguards of minority rights can align local leaders’ incentives with citizens’, so promoting power-sharing and discouraging local capture or oppression. “Fragmentation of authority” is a mistaken inference; what decentralization really does is transform politics from top-down to bottom-up, embracing many localities and their concerns. The state moves from a simpler, brittler command structure to one based on overlapping authority and complex complementarity, where government is more robust to failure in any of its parts. Well-designed reform, focusing on services with low economies of scale, with devolved taxation and bail-outs prohibited, should increase public accountability. Lastly, we advance a novel way that decentralization can strengthen democracy: by allowing citizens to become political actors in their own right, the small scale of local politics should promote social learning-by-doing, so strengthening political legitimacy, state-building, and ‘democratic suppleness’ from the grassroots upwards.

The Imperative of Good Local Governance is a true state-of-the-art volume in the field of local governance, decentralization and local democracy summarizing a substantial part of the insights from original research in the last decade. It is also a future-looking volume with explicit policy relevance, paving the way for innovative thinking (and acting) on the next phase of development in the field. In a unique way it brings together authoritative contributions from authors that to a large extent have been defining the field for the last decade or more. From a theoretical perspective it is adjoining top–down and bottom–up rationalities, which is further illuminated through a wide variety of key case studies. The case studies are selected for their relevance for the theoretical perspectives offered, as well as for their paradigmatic power in the current global evolution of decentralized policies and politics. The volume concludes that overall, local development and local politics will not go away – it has a huge potential – but also that the field is full of unfulfilled promises, some of which could be remedied through the perspectives revealed in this volume.