19
example, local customers can only manage clinics, classrooms, local water and
electricity utilities effectively if regulatory capacity has been devolved in an
appropriate manner.
6
Essential to making services work is the availability of sub-
national finance, the division of administrative responsibilities and the existence
of local capability and capacity.
Where meaningful resources are transferred,
functional responsibilities are clarified, and accountability mechanisms are
established at the local level, decentralization may effectively produce the
economic and social benefits that policy makers intend.
35. Decentralization has had mixed results and the poor frequently do not benefit
from the transfer of power. There are three reasons why decentralization has not
had the success that were hoped for.
Central governments often reallocate responsibilities to the local level to
avoid fiscal responsibility. In such cases, decentralization rarely ensures
that adequate fiscal capabilities are in place to accompany new
responsibilities.
Due to flawed institutional design, sub-national authorities often act in
opportunistic ways, reducing accountability.
Local governments often find themselves overwhelmed because they lack
the technical capacity and experience necessary to undertake new
responsibilities
6
Devolution can be defined as the handing over of resources to local politicians
.
Convention