decentralization in Bolivia, an overwhelmingly disproportionate amount of public resources were concentrated in the capital city and its surroundings. Finally, centralgovernment provision could also lead to greater corruption and misuse of funds, as the service recipients in a local district cannot monitor the bureaucrat or politician in the capital city (Bardhan and Mukherjee 2000).

However, despite these problems associated with central delivery of services, the experience with decentralization has been quite mixed (World Bank 2003; Burki, Perry, and Dillinger 1999). While success or failure is difficult (and premature) to judge, some common problems associated with decentralization’s impact on service delivery have begun to emerge.

The most frequently-cited problem is the lack of capacity at sub-national levels of government to exercise responsibility for public services. In Uganda and Tanzania, the lower tiers of government lacked the ability to manage public finances and maintain proper accounting procedures. Since these were a requirement for transferring money to the lower tiers, they actually received less money than before decentralization. In Uganda, spending on primary health care fell from 33 percent to 16 percent during decentralization (Akin, Hutchinson, and Strump 2001). In Ethiopia, where decentralization goes down to the third tier or woreda level, some woredas lack enough people who can read and write to operate the district governments (Swaroop?).

A second problem is that decentralization has led to misaligned responsibilities, possibly because the process is incomplete, possibly for political reasons. Although Pakistan has devolved responsibility for education to the districts, school teachers remain employees of the provincial government. The district _nazim_ or elected executive has little authority over the hiring, firing, evaluation, or placement of teachers.

Third, while decentralization was in some cases intended to strengthen the political power of lower tiers of government vis-à-vis the center, it has also increased the possibility of political capture within these lower tiers. In 1979, Indonesia established “village governments” with locally-chosen village heads accountable to village councils that would determine budget priorities. A study of 48 rural villages showed that, since village heads chose the members of the council, accountability to the villagers was weak; only 3 percent of the village proposals were included in the district budgets. Those villagers who participated in government organizations were more likely to speak out at village council meetings, crowding out the voice of others in the village (World Bank 2001).

Fourth, a host of other problems, not associated with service delivery, have nevertheless helped to undermine service delivery in decentralizing economies. For instance, the “soft-budget constraint” facing sub-national governments has led to overborrowing (Rodden, Eskeland, and Litvack 2003) and, in the case of Argentina, a major macroeconomic crisis at the end of 2001. The social impact of the Argentinian crisis has clearly been a deterioration in service quality: poverty rates jumped 40 percent, 12 percent of the people with formal health insurance discontinued their policies, medical supplies were in short supply throughout the public hospital network and in 2002 a third of the provinces experienced school closings of 20-80 days out of a 180-day school year (World Bank 2003).

2