The Urban Institute
Over the past 10 years, the international development community has often seen decentralization and local governance issues through a narrow lens, focusing exclusively on the devolution of financial resources within the context of elected local governments. This paper seeks to define a more detailed metric of (local) public sector finances, recognizing that the central authorities in each country interact with residents, civil society, and the private sector in three ways:
- Through the direct or delegated delivery of public services (by central government entities);
- Through deconcentrated departments or jurisdictions; and/or
- Through devolved local governments.
Formulating a detailed methodology for measuring local public sector finances will serve as a foundation to better understand the production function of public sector outputs and outcomes.