ASi" kUCTURE FlOR DEVELOPMENT

nancing to ensure that communities are willing to
pay for the quality of road service provided-if all Igare 4. oitries wvith decetaid
costs were borne by higher government levels, local wad mdaitenance -nave btter ro 6ads,
reidents would prefer paved roads. A review of
forty-two developing countries found that, where .
-road maintenance was decentralized, bacldogs were
P--,eicentage_oF rodslower
and the condition of roads was better (al- - -
thiough thie e-ffect of financing dcleontraliztion was L- ~ 5 012 533
not included) (Figure 4.1). The decentralied cases ,
also had higher proportions of paved roadway. But
decentralization was also associated with high-er unit Tnpvdros
costs of maintenance (partially reflecting the higher
share of paved woads) and with wider differences in
quality across regions (reflecting interregional differences
in institutional or human capacity).
DEca,rrRAuzxnoN IN wATER AND SANITAloN. An
analysis of World Bank-funded projects demonstrates
thiat a division of responsibfiiies, provided
that there~ is suitable coordination, leads to better
performance and miaintenance in the water~ and
sanitation sectors than would be the case in more
Paived road
Cntaize eU
flenraid
centralized frameworks. Data for a group of devel- --
oping countries reveal that per capita water produc- 5rWdd Idaa£42eelpgom2s
tion costs are four times higher in centralzed 'than -
in fully decentralized systems and are lowest when
decentraliztion is combined with centralied coordinationt
Mast water sector studies recommend a gional public utilities often take over local functions
three-tiered organ'ization, with a national agency re- on contract from those municipalities that lack the
sponsible for finance, long-term planning, standard -necessary scale of operation to be economic..
setting, and technical assistance. Under the national Decentralization is. not inherently good or badagency,
regional utilities function as operators, mon- As with all arrangemnents, its success depends on
itoring compliance with national standards and reg- the incenitives it creates, the capabilities it can draw
ulatiorns, supervising local systems, and training on, and the costs it imposes.-To improve incentives,
local managers and technical staff. The third tier public accountability is essential and can be enconsists
of local agencies that manage the local sy- hanced by local choice of leaders, local control of fi-.
tern, collect fees, monitor use and maintenance, and nances, and other forms of local responsibility. Elecplan
local budgets. An alternative decentralized tions are one mechanism for involving citizens in
arrang ement found* in France and Germany (and choices-electoral reformn in Colombia and Veneemerging
in Brazil and Poland) moves mnanagement zuela has produced a resurgence in 1hcal leadership.
of each activity to the lowest appropriate level. For Newly elected mayors have been able to mobilize
example, water resource mnanagement-including private sector financing for investment prograrns_ In
regulation, emission standard setting, and invest-. order to be held accountable, local leaders must
merit decisi'ons-is at the water basin (rather than have controL This includes control over revenues,
the national) level, while the provision of services is which in turn requires ade quate local finance laws
left to municipalities.
(covering budgeting financial reporting, taxation,
Of course, technical considerations may dictate contracting, and dispute settlement). In many countcollaboration
and planning across government 1ev- tries, key responsibilities of local governmentsels.
For example, water and santitation investment including the ability to tax or to charge user feesdecisions
made by regional utilities have to be coor- can be suspended by the central bureaucracy withdinated
with local land-use planning.. And linilta- out consultation. T-his lack of autonomy discourages.
tions are often imnposed by local capacity. In Brazil, local administrators and contributes to a popular
although municipalities are constitutionally as- image of local government inefficiency or even corsigned
respons-ibility for delivery of urban water, re- muption. Accounts and audits are important sources
75