What is Decentralization?

This draft document sets out the basics of decentralization. Along with fundamental definitions, it provides: the rationales in favor, and the drawbacks, of decentralization; the country specific factors that impact decentralization; and the requirements for its success. Additionally, the document discusses fiscal federalism and the basic considerations associated therewith. These include how to: assign expenditure responsibilities; raise and assign revenue; and eliminate revenue gaps. Finally, institutional design considerations and the decentralization of service delivery are considered. With respect to the design considerations, the following five factors are highlighted: the regulatory framework, the organization of service delivery, the information systems and competition, the potential for asymmetric decentralization, and the need for policy synchronization. In discussing service delivery, the document focuses on: education, healthcare, infrastructure, social safety nets, water services, and natural resources and the environment.