A Cross-Country Comparison 1658. Decentralizing the responsibility for roads costs more at first, mostly through losses in economies of scale. But those losses may be outweighed by increases in efficiency when the locus of roadwork is closer to the people. Minimizing costs is often cited as essential for optimizing service delivery.
Roads are the oldest, most important infrastructure services provided by governments.
In short, decentralization entails initial costs, mostly as losses in economies of scale. But those losses can be outweighed by increases in efficiency when the locus of roadwork is closer to the people. If both resource and preference costs are considered, local government should have more than 40 but less than 70 percent of fiscal responsibility. If only resource cost efficiencies are considered, there should be complete decentralization. To minimize resource costs, construction should be either completely centralized or completely decentralized.