As we approach this year’s deadline for achieving the UN’s Millennium Development Goals, the global development community is trying to decide how to make the new targets for 2030 more responsive and appropriate to local needs.
An important piece of this debate concerns the role of local governments, and how local spending on public services such as health care and education could promote human welfare. A growing body of research explores this relationship, but so far the focus of most studies has been limited to spending by elected local governments, with the assumption that this type of local spending is the only type that matters. Yet many local entities responsible for service delivery in the developing world are not elected. Excluding resources provided directly by central government ministries or their local administrative arms ignores a rich and complicated story of how different levels of government interact to provide basic services.
Over the past two years, the Urban Institute has worked with the Development Partner Working Group on Decentralization & Local Governance (DELOG) to collect data on public expenditures in the health and education sectors to see if we could find a relationship between service delivery outcomes and the proportion of money that was spent locally.
Unlike previous studies, our research (led by Urban’s Dr. Jamie Boex) includes expenditures by elected local governments, deconcentrated local administrations (that do not have their own elected political leadership), public funding of delegated entities such as parastatal organizations or NGOs, and direct support from central government line ministries in providing local services.
We found that up to two-thirds of public spending on local health and education services is routed around local governments rather than through their budgets. What’s more, when we include these other types of expenditures in the analysis, we see a positive relationship between local spending levels and better outcomes in each sector. (That may seem intuitive, but there simply is not a lot of evidence on this topic.)
This suggests that much of the work on whether local governments can effectively drive development has missed an important aspect of how local service delivery is actually financed. That’s beginning to change. In December, the Urban Institute presented its final findings to our DELOG partners at the UN headquarters in New York, and the complete report is now available as a PDF.
Our team at Urban is also building on these findings through the Local Public Sector Initiative and urban service delivery research, expanding our public service and expenditures data sets, and branching out into other sectors such as water and sanitation.
You can explore the health and education spending patterns by country in the charts below, and learn more about this research on our site.
This analysis uses global data sets wherever possible (like comparative indicators from the World Bank), but this information was often incomplete or lacked important details about the original sources. A significant amount of the data was collected from primary sources at the country level. In order to compare spending across all 29 countries for the same year, we used reported expenditure data from 2010 that offered the most complete information in each sector. Data visualization by Ben Chartoff, Urban Institute.