Foreign Aid and Decentralization
Limitations on Impact in Autonomy and Responsiveness
Donor support for decentralization comes in two main categories: policy support to increase the autonomy of subnational governments (SNGs) and project/program activities to improve the responsiveness and accountability of those SNGs. In the former, donors advocate for reforms that increase the extent or ‘quantity’ of decentralization, whereas in the latter, they aim at the ‘quality’ of decentralized governance. Drawing upon this distinction, this paper's argument is twofold. The principal argument is that donors have had modest causal impacts on the quantity of decentralization because the preexisting political incentives of central governments are sufficient to explain decisions for major reforms. Decentralization advances farthest when there are regime-level incentives to decentralize, a moderate amount when there are government-level incentives, and minimally when donors (or other actors outside the central state) are leading champions of decentralization. The second argument of the paper is that donor efficacy is further complicated by partially conflicting emphases that sometimes tradeoff local autonomy with accountability. Implications include support for those programming efforts that pair autonomy with responsiveness at the local level.