The Management of Local Government Finances: Local Planning, Budgeting, and Service Delivery

Abstract

The ultimate benefits from decentralization (both in the quality of local government services as well as in the overall improved efficiency of the public sector) are greatly influenced by the manner in which decentralization reforms are actually implemented. In fact, it is not unusual for the implementation of decentralization reforms to differ significantly from its original conception. It is possible, for example, that a local expenditure program designed to be accessible by all households and to be progressive in its incidence becomes highly regressive in practice due to the failure of local governments to implement or administer the program as intended. As such, the political decision-making processes as well as the local administrative dimension (encompassing both local financial management as well as the actual delivery of services) are crucial to the sound functioning of the local government finance system.