Decentralization and Development

Abstract

This chapter addresses the theory of decentralization and its experience since the early 1970s. National governments centralized the financing and management of public services and infrastructure in both industrialized and developing countries during the 1950s and 1960s for many reasons. In developing countries, many political leaders sought to build their new nations through the central government&s;s control of the economy. The dominant development theories of the 1950s and 1960s called for strong central government control over industrial and agricultural sectors as well as the public services and infrastructure needed to accelerate economic growth. Continued economic globalization through international trade and investment gave cities and metropolitan regions important new economic roles in the 1990s. The success of fiscal decentralization in emerging market countries has depended heavily on the quality of national governance. Positive impacts of decentralization on infrastructure investment also depend in part on the accuracy of local opinion about needs and priorities.