File2-page239 - Besley Ghatak(Mimeo Decentralisation and...

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Decentralisation and NGOs Localities differ in their capacity to raise revenue and this tends to lead to the emergence of dramatic regional inequalities in levels of social sec- tor spending. Funding bases tend to be weakest where social protection needs are greatest so that there is mismatch between local demand for these measures and funding capability and because labour is relatively immobile, migration often does not represent a viable means for improv- ing the matching between demand and supply. Local governments in these transition economies often do not have much experience with administering social protection programmes and as a re- sult there are often no institutions in place to administer programmes. Limited institutional capacity is thus a major constraint on this form of decentralisation. Local governments also tend to be under the control of local elites. In this situation, the local budgetary process which determines local levels of spending is typically non-transparent and there are limited
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