Decentralization and urban service delivery – implications for foreign aid

As the fastest urbanizing region of the world, African governments face critical challenges in terms of providing their citizens with adequate services, such as potable water, sanitation, proper housing, and electricity. Although the provision of such services is often the responsibility of local authorities, few African countries are fiscally decentralized and therefore, municipal authorities lack the financial resources to adequately deliver these services. With low tax bases, these sub-national authorities are often forced to rely on intergovernmental transfers from the central government. Where the central government remains in the hands of the ruling party and sub-national governments are controlled by an opposition party, a situation known as 'vertically divided authority', these transfers can be highly politicized. By relying on a sub-national and cross-national comparative case study approach, this project will address the intersection between politics, public administration, service delivery, and development economics in order to highlight the best options for providing foreign aid to address the challenges of urbanization.

Specifically, this project will uncover whether vertically divided authority reduces the delivery of basic urban services through reductions in intergovernmental transfers and highlight what donor modalities are most useful for ensuring that foreign aid intended to fund urban services does so in situations of vertically divided authority. Decentralization and urban development increasingly are priority areas for national governments, donors, and international organizations. By understanding how local politics impacts the delivery of basic services across cities and across countries, the project therefore can offer policy prescriptions regarding how to ensure that aid for the urban sector and aid for decentralization generate positive synergies.