The Multi-faceted Debate on Decentralization and Collective Welfare

Abstract

Studies on the relation between decentralization reforms and the performance of governments and their policies have presented a myriad of theoretical developments but inconclusive results on the empirically verifiable effects of these propositions. Many of the reviews carried out thus far in this field merely criticize these propositions without proposing alternatives for analysis. This article presents a review of this debate in a very specific way: it selects the propositions that points towards the causal factors explaining government's responsiveness to its citizens. Four types of interpretations are discussed: 1) allocative efficiency theories of fiscal decentralization, 2) the multiple dimensions of decentralization, 3) the institutional design of reforms, and 4) the qualitative aspects of governance. Despite the observed divergences in the use of concepts, analytical preoccupations and in relation to the empirical operationalization of variables, this article points to a series of hypotheses that could be extracted from this debate and that could be the object of an empirical test.