Exploring the Measurement and Effectiveness of the Local Public Sector

Research Report

Exploring the Measurement and Effectiveness of the Local Public Sector

Toward a Classification of Local Public Sector Finances and a Comparison of Devolved and Deconcentrated Finances
January 6, 2012

Abstract

Over the past 10 years, the international development community has often treated decentralization and local governance issues through a narrow lens, focusing exclusively on the devolution of financial resources within the context of elected local governments. This paper seeks to define a more detailed metric of (local) public sector finances, which recognizes that the central authorities in each country interact with residents, civil society, and the private sector in three ways: through the direct or delegated delivery of public services (by central government entities); through deconcentrated departments or jurisdictions; and/or through devolved local governments. Formulating a detailed methodology for measuring local public sector finances will serve as a foundation to better understanding of the production function of public sector outputs and outcomes.

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