Why decentralization works and does not works? A systematic literature review

Sujarwoto Sujarwoto


This systematic literature review is purposed to elaborate why decentralization works and does not works? The results show that decentralization will increase public services at sub national level or local government when certain conditions exist. Empirical findings across developing countries in last decades show that decentralization will benefit for improving local public services when competitive and fair local election, transparency, checks and balance, citizen participation and community social capital exists. Capacity of public servants and availability of basic infrastructures is also key conditions for effective decentralization across developing countries.


decentralization, public services, systematic reviews

Full Text:



Agrawal, A., & Ostrom, E. (2001). Collective action, property rights, and decentralization in resource use in India and Nepal. Politics & Society, 29(4), 485-514.

Agrawal, A., & Ribot, J. (2000). Analyzing decentralization: A frame work with South Asian and East African environmental cases. World Resources Institute Institutions and Governance Program Working Paper Series.

Anderson, S. E. (2003). The school district role in educational change: A review of the literature. International Centre for Educational Change.

Azfar, O., Kähkönen, S., Livingston, J., Meagher, P., & Rutherford, D. (2000). Making decentralization work: An empirical investigation of governance and public services in Uganda. IRIS Centre, University of Maryland.

Baiocchi, G. (2001). Participation, activism, and politics: the Porto Alegre experiment and deliberative democratic theory. Politics & Society, 29(1), 43-72.

Bardhan, P., & Mookherjee, D. (2000). Capture and governance at local and national levels. The American Economic Review, 90(2), 135-139.

Bardhan, P., & Mookherjee, D. (2003). Poverty alleviation effort of West Bengal panchayats. Economic and Political Weekly, 39(9), 965-974.

Bardhan, P., & Mookherjee, D. (2006a). Decentralisation and accountability in infrastructure delivery in developing countries. The Economic Journal, 116(508), 101-127.

Bardhan, P., & Mookherjee, D. (2006b). Decentralization and local governance in developing countries: a comparative perspective (Vol. 1): The MIT Press.

Bienen, H., Kapur, D., Parks, J., & Riedinger, J. (1990). Decentralization in Nepal. World Development, 18(1), 61-75.

Blas, E., & Limbambala, M. E. (2001). User-payment, decentralization and health service utilization in Zambia. Health policy and planning, 16(suppl_2), 19-28.

Booth, J. A., & Richard, P. B. (1998). Civil society, political capital, and democratization in Central America. The Journal of Politics, 60(3), 780-800.

Bowles, S., & Gintis, H. (2002). Social capital and community governance. The Economic Journal, 112(483).

Burki, S. J., Perry, G., & Dillinger, W. R. (1999). Beyond the center: Decentralizing the state: World Bank Publications.

Coase, R. (1960). The Problem of Social Cost, Journal of Law and Economics (pp 1-44). Also in Readings in Microeconomics.

Crook, R. C., & Manor, J. (1998). Democracy and decentralisation in South Asia and West Africa: Participation, accountability and performance: Cambridge University Press.

Crook, R. C., & Sverrisson, A. S. (1999). To what extent can decentralized forms of government enhance the development of pro-poor policies and improve poverty-alleviation outcomes?

Davoodi, H., & Zou, H.-f. (1998). Fiscal decentralization and economic growth: A cross-country study. Journal of Urban economics, 43(2), 244-257.

De Mello, L. R. (2000). Fiscal decentralization and intergovernmental fiscal relations: a cross-country analysis. World Development, 28(2), 365-380.

De Mello, L. R., & Barenstein, M. (2001). Fiscal decentralization and governance: a cross-country analysis.

de Sousa Santos, B. (1998). Participatory budgeting in Porto Alegre: toward a redistributive democracy. Politics & Society, 26(4), 461-510.

Deininger, K., & Mpuga, P. (2005). Does greater accountability improve the quality of public service delivery? Evidence from Uganda. World Development, 33(1), 171-191.

Diaz‐Serrano, L., & Rodríguez‐Pose, A. (2012). Decentralization, Subjective Well‐Being, and the Perception of Institutions. Kyklos, 65(2), 179-193.

Dillinger, W. (1995). Decentralization, politics and public services. AFFONSO e SILVA, 105-122.

Eskeland, G. S., & Filmer, D. (2002). Autonomy, Participation, and Learning in Argentine Scholls (Vol. 2766): World Bank Publications.

Estache, A., & Sinha, S. (1995). Does decentralization increase spending on public infrastructure?

Faguet, J.-P. (2001). Does Decentralization Increase Responsiveness to Local Needs?: Evidence from Bolivia (Vol. 2516): World Bank, Development Research Group, Public Economics.

Fisman, R., & Gatti, R. (2002). Decentralization and corruption: evidence across countries. Journal of Public Economics, 83(3), 325-345.

Fiszbein, A. (1997). The emergence of local capacity: Lessons from Colombia. World Development, 25(7), 1029-1043.

Foster, A. D., & Rosenzweig, M. R. (2001). Imperfect commitment, altruism, and the family: Evidence from transfer behavior in low-income rural areas. The Review of Economics and Statistics, 83(3), 389-407.

Galasso, E., Ravallion, M., & Salvia, A. (2001). Assisting the transition from workfare to work: A randomized experiment.

Grindle, M. S. (2007). Going local: decentralization, democratization, and the promise of good governance: Princeton University Press.

Gurgur, T. Shah.(2002). Localization and Corruption: Panacea or Pandora's box. World Bank Policy Research Working Paper(3486).

Hayek, F. A. (1948). Individualism and economic order: University of chicago Press.

Heller, P. (2001). Moving the state: the politics of democratic decentralization in Kerala, South Africa, and Porto Alegre. Politics & Society, 29(1), 131-163.

Henderson, J. V., & Kuncoro, A. (2004). Corruption in Indonesia. Retrieved from

Huther, J., & Shah, A. (1998). Applying a simple measure of good governance to the debate on fiscal decentralization (Vol. 1894): World Bank Publications.

Jütting, J. P. (2004). Do community-based health insurance schemes improve poor people’s access to health care? Evidence from rural Senegal. World Development, 32(2), 273-288.

Khaleghian, P. (2003). Decentralization and public services: the case of immunization.

King, E., & Ozler, B. (1998). What’s decentralization got to do with learning? The case of Nicaragua’s school autonomy reform. Development Economics Research Group, Working Paper Series on Impact Evaluation of Education Reforms, 9.

Kruse, I., Pradhan, M., & Sparrow, R. (2012). Marginal benefit incidence of public health spending: Evidence from Indonesian sub-national data. Journal of Health Economics, 31(1), 147-157.

Litvack, J. I., Ahmad, J., & Bird, R. M. (1998). Rethinking decentralization in developing countries: World Bank Publications.

Manin, B., Przeworski, A., & Stokes, S. (1999). Elections and representation. Democracy, accountability, and representation, 29-54.

Manor, J. (1999). The political economy of democratic decentralization.

Martinez-Vazquez, J., & McNab, R. M. (2003). Fiscal decentralization and economic growth. World Development, 31(9), 1597-1616.

Narayan, D. (1998). Participatory rural development. Agriculture and the Environment: Perspectives on Sustainable Rural Development, 103.

Oates, W. E. (1993). Fiscal decentralization and economic development. National tax journal, 46(2), 237-243.

Ostrom, E. (2000). Social capital: a fad or a fundamental concept. Social capital: A multifaceted perspective, 172(173), 195-198.

Peterson, G. E. (1997). Decentralization in Latin America: learning through experience: World Bank Publications.

Phillips, K. L., & Woller, G. (1997). Does fiscal decentralization lead to economic growth. Department of Economics, Brigham Young University.

Prud'Homme, R. (1995). The dangers of decentralization. The world bank research observer, 10(2), 201-220.

Putnam, R. D. (1993). The prosperous community. The american prospect, 4(13), 35-42.

Rajkumar, A. S., & Swaroop, V. (2008). Public spending and outcomes: Does governance matter? Journal of development economics, 86(1), 96-111.

Ravallion, M., Galasso, E., Lazo, T., & Philipp, E. (2005). What Can Ex-participants Reveal about a Program’s Impact? Journal of Human Resources, 40(1), 208-230.

Ribot, J. C. (2004). Waiting for democracy: the politics of choice in natural resource decentralization.

Ribot, J. C. (2007). Representation, citizenship and the public domain in democratic decentralization. Development, 50(1), 43-49.

Rodríguez-Pose, A., & Bwire, A. (2003). The economic (in) efficiency of devolution: London School of Economics Department of Geography & Environment.

Rondinelli, D. A., McCullough, J. S., & Johnson, R. W. (1989). Analysing decentralization policies in developing countries: a political‐economy framework. Development and change, 20(1), 57-87.

Sarker, A. E. (2008). Patron-client politics and its implications for good governance in Bangladesh. Intl Journal of Public Administration, 31(12), 1416-1440.

Soerojo, W., & Wilson, N. (2001). Decentralization and immunization services in Indonesia. Consultant report prepared for East Asia and Pacific Division, World Bank, Washington, DC Processed.

Tiebout, C. M. (1956). A pure theory of local expenditures. Journal of political economy, 64(5), 416-424.

Treisman, D. (2000). The causes of corruption: a cross-national study. Journal of Public Economics, 76(3), 399-457.

Wade, R. (1997). How infrastructure agencies motivate staff: canal irrigation in India and the Republic of Korea. Infrastructure Strategies in East Asia, 109-130.

Wibbels, E. (2005). Federalism and the market: Intergovernmental conflict and economic reform in the developing world: Cambridge University Press.

Wildavsky, A. (1976). A bias toward federalism: confronting the conventional wisdom on the delivery of governmental services. Publius, 6(2), 95-120.

Winkler, D. R., & Rounds, T. (1996). Municipal and private sector response to decentralization and school choice. Economics of Education Review, 15(4), 365-376.

Woolcock, M. (1998). Social capital and economic development: Toward a theoretical synthesis and policy framework. Theory and society, 27(2), 151-208.

Xie, D., Zou, H.-f., & Davoodi, H. (1999). Fiscal decentralization and economic growth in the United States. Journal of Urban economics, 45(2), 228-239.

Zhang, T., & Zou, H.-f. (1998). Fiscal decentralization, public spending, and economic growth in China. Journal of Public Economics, 67(2), 221-240.


  • There are currently no refbacks.