The local public sector delivers services crucial for achieving sustainable and inclusive development. However, little is known about the extent to which the structure of a country's public sector contributes to successful service delivery outcomes. With USAID's support, the Urban Institute analyzed the vertical allocation of resources within the public sector in ten developing countries. Results show considerable variation in the degree to which financial resources flow to the local public sector (from less than 20 percent to over 50 percent), and a positive relationship appears to exist between the size of the local public sector and government effectiveness.
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