DHB: Decentralization and Local Public Goods: How Does Allocation of Decision-Making Authority Affect Provision?

  • Madajewicz, Malgosia M. (PI)
  • Pfaff, Alexander A. (CoPI)
  • Loh, Ji Meng (CoPI)
  • Dolgoarshinnykh, Regina R.G. (CoPI)

Project: Research project

Project Details


Access to services such as sanitation, health care and education remains inadequate for much of the world's population. As much as 20 percent of the world's population lack safe drinking water and sanitation. The objective of this study is to determine under what conditions decentralization of decision-making authority improves access to services. The project focuses on safe drinking water, though the analysis applies to all services and more broadly to other types of organizations. Decentralization and its benefits have been popular topics in academic and policy literatures. The World Bank advises that communities should be involved in all projects designed to assist them, including the provision of services. Evidence regarding the effect of community participation, however, is mainly anecdotal and the record is mixed. Existing literature does not provide a categorization of conditions under which decentralization improves outcomes and data documenting the impact of decentralization in practice is scant.

This project identifies which decisions should be delegated to the community under what conditions in order to maximize social welfare. The study is based on the idea that social dynamics determine when delegation is desirable. The theoretical analysis models the effect of community characteristics, such as the distribution of wealth, social networks and community size, on decisions made by individuals who consume and provide services, i.e. community members and service agencies. These decisions in turn determine access to services and social welfare. The effect of social dynamics on organizational structure has not been modeled formally in the decentralization literature and the study advances modeling techniques.

The researchers will also conduct an organizational experiment and collect original data in order to test and refine the theory. They will collaborate with private, non-profit organizations (NGOs) in Bangladesh, where the groundwater is contaminated with unsafe levels of arsenic. The NGOs are working to supply safe drinking water. The team will randomly assign three types of interventions, which correspond to types of delegation studied in the theoretical model, to help villages provide safe water. They will collect household-level data to document outcomes in these villages and in a control group of villages in which no intervention occurred. The experiment will allow the researchers to observe differences between village outcomes which are caused by the interventions. The NGOs will apply the lessons to reduce the impact of the arsenic crisis, which is affecting the lives of forty million people. The research team will disseminate the results widely in order to help improve access to services and the performance of organizations elsewhere.

Effective start/end date12/1/0611/30/12


  • National Science Foundation: $749,926.00


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