File2-page233 - where infor-mation is imperfect and where...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Decentralisation and NGOs Public Goods and Economic Development Decentralisation: the critical question here is whether a decentralised sys- tem is more efFcient (in the sense of generating greater welfare gains for a given level of revenue) than a centralised system of provision Requires an analysis of how decentralisation affects the structure of infor- mation and incentives , the valuation of social services , and the functioning of institutions and markets . In a Frst-best world with benevolent government, where all information, power and decision-making can be incorporated into one centre, centrali- sation of the provision (and Fnancing) of social protection is optimal. Optimality of centralisation may not hold when there are asymmetries along these different dimensions between different levels of government In a second-best world, where lump sum taxation is infeasible
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: , where infor-mation is imperfect and where power is shared between different levels of govern-ment , decentralisation can relax the basic social protection Fnancing con-straint through the following two distinct channels: (i) Decentralisation of provision responsibility may improve the efFciency of provision, leading to greater impact for a given level of expenditure. (ii) Decentralisation of revenue generation may in some areas be more ef-Fcient and may therefore create additional revenue for social protection measures. There are strong arguments in favour of decentralising provision where local governments are representative and accountable, arguments. Argu-ments for the decentralisation of revenue generation are less convincing. Decentralisation of Provision Economic Arguments: Development Economics, LSE Summer School 2007 230...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online