Urban Institute's Local Public Sector Initiative branches out

IDG News, September 2013 - For the past three years, the Urban Institute’s Local Public Sector Initiative has been pursuing its research agenda based on a simple premise: while virtually all human development takes place in a localized manner, the role of the local public sector in achieving development is poorly understood.

With support from the Development Partner Working Group on Decentralization and Local Governance, UI is setting out build on LPSI’s initial findings by analyzing the role of the local public sector on global development outcomes in health and education from 2000 through 2010 for approximately 60 developing and transition countries.

An Expert Roundtable was hosted by UI on January 13, 2012, in order to bring together experts from the World Bank, the IMF, OECD, USAID, academia, and other selected policy practitioners. The purpose of the roundtable was to identify gaps in the state of knowledge on the linkages between local public sector finances, subnational governance and local public service delivery in developing and transition countries. In addition, the roundtable provided input into the development of the Local Public Sector Country Profile, which is a comprehensive set of comparative metrics that capture key aspects of the local public sector.

Supported by a research grant from the US Agency for International Development, and working with a host of international development agencies, UI prepared a detailed analysis of local public sector expenditures in ten developing countries. This analysis revealed that there is considerable variation in the size and composition of local public sector expenditures between countries, ranging from less than 20% of total public sector expenditures to over 50% of total spending. The analysis further suggests that in reality, countries do not rely exclusively on either devolved local governments or deconcentrated administrations to deliver public services: instead, countries typically pursue a multi-level approach to service delivery and development, by which front-line services are delivered and funded through multiple mechanisms at the same time. The study also suggests that there is a positive relationship between the size of the local public sector and the degree of government effectiveness.

While strong arguments can be made that improved local governance and decentralization will contribute to more efficient public services and greater economic growth, this view is not universally shared within the development community. In order to explore the impact of local public sector spending and local institutions on development outcomes further, UI has partnered with the Development Partner Working Group on Decentralization and Local Governance (DELOG) to engage in a study of The Local Public Sector's Role in Achieving Development Goals.

It is the ambition of the joint UI-DELOG study to analyze changes in global development outcomes in health and education from 2000 through 2010 for approximately 60 developing and transition countries. After collecting the necessary country data through DELOG’s network of development partner agencies, the study will analyze whether countries that spent a greater share of sectoral financial resources at the local level –among other factors- were able to have a bigger impact on human development as measured by the MDG indicators in health and education. In addition, the study will examine whether differences in local governance and local administrative practices have an impact on MDG outcomes in health and education. In other words, do countries that rely on elected local governments for the provision of health and education services have better sector outcomes that rely on more centralized systems?

The first phase of the study on The Local Public Sector's Role in Achieving Development Goals is expected to be completed by mid-2014. Please contact Jamie Boex for further information about the Local Public Sector Initiative or the study on The Local Public Sector's Role in Achieving Development Goals.