Participatory Local Democracy

Exploring the Measurement and Effectiveness of the Local Public Sector: Toward a Classification of Local Public Sector Finances and a Comparison of Devolved and Deconcentrated Finances

The Urban Institute
Jameson Boex
December 2011

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:

1. Through the direct or delegated delivery of public services (by central government entities);
2. Through deconcentrated departments or jurisdictions; and/or
3. 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.