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Decentralizing development: Allocating public goods via competition

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  • Chavis, Larry

Abstract

Decentralizing the allocation of public goods by giving funds directly to communities takes advantage of local information concerning needs, but leaves funds open to misuse or capture by local elites. A large scale development project in Indonesia attempts to overcome this downside of decentralized allocation by having communities compete locally for block grants. Competition weeds out less efficient projects. Increasing the number of villages bidding by 10% leads to a 1.8% decline in road construction costs. Increased community participation in project planning also leads to better outcomes.

Suggested Citation

  • Chavis, Larry, 2010. "Decentralizing development: Allocating public goods via competition," Journal of Development Economics, Elsevier, vol. 93(2), pages 264-274, November.
    • Handle: RePEc:eee:deveco:v:93:y:2010:i:2:p:264-274
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    References listed on IDEAS

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    Cited by:

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    2. Emilie Caldeira & Martial Foucault & Gregoire Rota-Graziosi, 2015. "Decentralization in Africa and the nature of local governments’ competition: evidence from Benin," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(6), pages 1048-1076, December.
    3. Iliopoulos, Constantine & Valentinov, Vladislav & Kvartiuk, Vasyl & Bartkowski, Bartosz, 2013. "Government-third sector relations in European rural development: A critical perspective," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 4(1), pages 65-80.
    4. Pan, Lei & Christiaensen, Luc, 2012. "Who is Vouching for the Input Voucher? Decentralized Targeting and Elite Capture in Tanzania," World Development, Elsevier, vol. 40(8), pages 1619-1633.
    5. Fox, Jonathan, 2020. "Contested terrain: International development projects and countervailing power for the excluded," World Development, Elsevier, vol. 133(C).
    6. Caesar Marga Putri & Josep Maria Argilés-Bosch & Diego Ravenda, 2023. "Thirty Years of Village Corruption Research: Accounting and Smart Villages for Village Sustainability as Future Research Direction," Sustainability, MDPI, vol. 15(12), pages 1-19, June.
    7. Buntaine, Mark T. & Daniels, Brigham & Devlin, Colleen, 2018. "Can information outreach increase participation in community-driven development? A field experiment near Bwindi National Park, Uganda," World Development, Elsevier, vol. 106(C), pages 407-421.

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