World Development • Decentralization and Governancewebmaster
London School of Economics and Political Science, UK
The most important theoretical argument concerning decentralization is that it can make government more accountable and responsive to the governed. Improving governance is also a central justiﬁcation of real-world reformers. But the literature has mostly focused on policy-relevant outcomes, such as education and health services, public investment, and ﬁscal deﬁcits. This paper examines how decentralization aﬀects governance, in particular how it might increase political competition, improve public accountability, reduce political instability, and impose incentive-compatible limits on government power, but also threaten ﬁscal sustainability. Such improvements in governance can help spur the broad historical transitions that deﬁne development.