Localizing Service Spending in Developing Countries

In January the Urban Institute completed a comparative study of health and education services in 29 developing countries, targeting the structure of spending among levels of government. The goal of this research was to take stock of how the local public sector contributes to human development goals.

Previous studies have considered contributions by elected local governments to global development objectives, but many countries use mixed systems of finance and administration to deliver public services. In these cases, the devolved authorities of local government bodies might be shared with local administrative arms of the central government, or semi-autonomous agencies chartered by the state. 

As the first study of its kind, our analysis considers not only devolved local expenditures but also deconcentrated and delegated expenditures, as well as direct support from line ministries in providing local services.

The final report was presented to the Donor Working Group on Decentralization and Local Governance (DELOG) in New York in January 2015. It builds on work supported by a host of international development partners including bilateral and multilateral donors.

Key findings:

  • Up to two-thirds of local public health and education spending is done by central ministries, not by local governments. Many previous studies of local services focused only on spending by elected local governments.
  • In places with higher proportions of localized health or education spending, there are better health and education outcomes. 
  • Local governments in many developing countries lack meaningful autonomy to deliver the services they are obligated to provide.


Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Donor Working Group on Decentralization and Local Governance (DELOG)

Period of Performance

July 2013 - April 2014


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, with support from the Development Partner Working Group on Decentralization and Local Governance (DELOG). 

Urban Institute's Local Public Sector Initiative branches out

Bangladesh is widely considered to be one of the most centralized countries in the world. Yet in recent years, substantive reforms have taken place in support of a more decentralized public sector. Indeed, its Sixth Five Year Plan (SFYP) the national government has committed to bringing "basic public services to people's doorsteps." The government's stated policy ambition leads to a simple question: what share of public resources is currently used to fund public services "at the door step of the people"? In other words, what is the size of the local public sector in Bangladesh? Initial analysis suggests that the total size of local public sector expenditures in Bangladesh (expressed as a percentage of total public expenditures) is approximately 16.2 percent. Based on this information, the Government needs to decide whether the share of public spending that is currently being devoted to the local public sector is adequate to reach its policy objectives, or whether it should increase local public spending in the future.

Providing Basic Public Services at the Door Step of the People?