The Local Public Sector's Role in Achieving Development Goals in Health and Education

IDG Research, January 2015: As the 2015 deadline for achieving the Millennium Development Goals approaches, the global development community is engaged in significant debate about the scope, details, and implementation of a new sustainable development agenda. Because key pro-poor services are delivered at the local level, one of the thematic elements of the discussion surrounding the post-2015 agenda has been the “localization” of the sustainable development goals.

With this in mind, the Urban Institute Center on International Development and Governance, in partnership with the  Development Partners Working Group on Decentralization and Local Governance (DeLoG), engaged in an empirical stock-taking exercise to assess the contribution of local governments (and the local public sector more broadly) in achieving global development goals. The study is based on an analysis of health and education expenditures in 29 countries.

As this is the first study of its kind, the analysis considers not only devolved sectoral expenditures but also deconcentrated and delegated expenditures, as well as direct support by central line ministries in the delivery of frontline service. This groundbreaking research includes several key findings:

Two-thirds of the local public sector in developing countries is hidden.

The analysis of the multi-country dataset reveals that countries typically rely on multiple models of decentralization at the same time in delivering health and education services. Local government expenditures account for only one-third of local public-sector spending on health and education among the countries examined, suggesting that the previous research has overlooked two-thirds of all local public-sector expenditures in these sectors. The analysis further reveals that countries spending less on public services through devolved mechanisms tend to make up the difference by spending more on local service provision through other modes of decentralization or localization.

Localization plays an important role in achieving development objectives. 

The analysis convincingly shows that there is a clear positive relationship between localized sectoral spending and sector outcomes in health and education: countries that spend a greater share of sectoral resources at the local level tend to perform better on key development indicators in health and education, including the literacy rate and the under-five mortality rate.

Local governments in many developing countries lack meaningful autonomy.

Though the study confirmed the important role of localized spending in achieving better development outcomes, the analysis was not able to conclusively determine whether local government spending has a bigger (or smaller) impact on sectoral development outcomes when compared with nonlocalized spending. It appears that the lack of meaningful local government control over the delivery of localized services is a key factor in limiting the ability of local governments to effectively contribute to stronger development outcomes.


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LOCALIZING PUBLIC SERVICES AND DEVELOPMENT: The Local Public Sector’s Role in Achieving Development Goals in Health and Education