# _Holding policy-makers accountable_

On the first part of the accountability relationship, the conventional wisdom, as mentioned, is that decentralization improves accountability as voters are better able to monitor the actions of policymakers given their relative proximity, and policy-makers in turn, seeking re-election, are responsive to voter demands. Since the median voter in a developing country is poor, and improvements in basic education, health and physical infrastructure services help the poor, this responsiveness results in better service delivery.

To evaluate this claim one must first understand why any democracy could produce outcomes that hurt the median voter. A large and growing literature on the subject has shown that political market failures, arising primarily out of information asymmetries, are the main reason for the non-accountability of elected officials to the public.<sup>2</sup> The key question therefore, is whether local governments are less prone to these political market failures.

Politicians care about getting elected, and they will focus on policies and will emphasize expenditure in areas that will maximize their electoral fortunes. Importantly, getting elected is also crucially contingent on information – specifically, it requires that voters are able to connect improvements or deteriorations in their welfare to the actions of a particular politician. In other words, politicians must be able to credibly take credit for these improvements. This importance of information implies that politicians are likely to be more responsive to the better informed group of citizens, and as a result focus more on private goods, or targeted benefits, as opposed to public goods that benefit the majority.

Some public goods, such as the provision of roads, are much quicker to implement and easier to verify and credit to the efforts of a particular politician, than others, such as better quality healthcare or education. As World Bank (2003) points out, education and health place very high informational demands on voters as these are transaction-intensive services with outcomes that are crucially dependent on the behavior of providers that are very difficult to monitor. Therefore, given a menu of demands, one would expect politicians to focus more on roads and other physical infrastructure, and less on education and health.

While some public goods like roads will get more attention than others, individual-specific favors will in general receive even greater priority. The reason is that demands for public goods and for individual-specific favors differ in the relative ease with which preferences are transmitted to policy-makers. Individual contacting for particularized benefits places the least organizational demands on citizens, and presents the clearest relationship between action and result. Demands for public goods entail free-rider problems and are therefore much more difficult to organize. Since individuals are much more likely to lobby for private goods, they are also likely to be much more informed about whether or not this demand was satisfied, and whether or not this fulfillment was due to the efforts of their elected representative. For example, people will observe how helpful the local representative’s office was, how much attention was paid to them, and what were the impressions of others waiting in line, and obviously whether they received the benefits. By contrast, improvements in service delivery will be much harder to measure.

The key question is whether local governments are better able to resolve these political market failures than provincial or national governments. On the one hand closer proximity might

> 2 Important recent works in this literature include Persson and Tabellini (2000); Keefer (2002); Keefer and Khemani (2003), Besley et al. 2004

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