Decentralization and Poverty


Ghana, India


To contribute to an understanding of the impacts of decentralization on poverty and development. As most developing countries have started to decentralize, there is a need to look at the impact of decentralization on poverty and the provision of public goods and services. A decentralized approach is expected to have a strong development impact. Decision making at the local level gives more responsibility, ownership, and thus incentives to local agents. Participatory local governments are generally better informed about the needs and preferences of the poor. However, there are also dangers and disadvantages as a consequence of decentralization. Decentralization can imply diseconomies of scale in the provision of public goods, and in the presence of a local elite, corruption can easily arise leading to "capture" of public resources.


Household surveys, econometric analysis


Asante, F.A. (2002), Poverty Reduction, Decentralisation and Access to Public Goods and Services in Ghana. Dissertation, ZEF, Bonn.

Braun, J. von and U. Grote (2002), Does Decentralization Serve the Poor? In: IMF, Fiscal Decentralization, Routledge Economics, Washington D.C., pp.92-119.

Köhling, W. (2002), Implications of India’s Judicial System for Economic and Agricultural Growth and Poverty Reduction. Dissertation, ISBN 3 – 8311 – 3572 - X

Lohlein, D. (2002), Decentralisation and the Provision of Social Infrastructure in Rural Russia: Economics of Service Provision during the Transition. Dissertation. ZEF, Bonn.

Duration of the Project

2000 - 2002


Ulrike Grote

Prof. Dr. Ulrike Grote