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Social funds and decentralisation: optimal institutional design

Faguet, Jean-Paul ORCID: 0000-0002-7188-0098 and Wietzke, Frank-Borge (2006) Social funds and decentralisation: optimal institutional design. Public Administration and Development, 26 (4). pp. 303-315. ISSN 0271-2075

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Identification Number: 10.1002/pad.413


Most of the 60+ developing countries that have established social funds (SFs) are decentralising their governments as well. But the question of how to tailor SFs - originally a highly centralised model - for a decentralising context has received relatively little attention in the literature. We first examine evidence on the ability of SFs to adapt to a decentralised context. We then lay out the implications of decentralisation for SF institutional design step-by-step through the project cycle. The topic is doubly important because social funds can increase their effectiveness, and the sustainability of their investments, by reorganising internal processes to take advantage of the political and civic institutions that decentralisation creates. Local government has an informational advantage in local needs and characteristics (time and place), whereas SFs have access to better technology and knowledge of sectoral best practice. The key is to create institutional incentives that best combine these relative advantages.

Item Type: Article
Official URL:
Additional Information: © 2006 John Wiley & Sons.
Divisions: STICERD
International Development
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: O - Economic Development, Technological Change, and Growth > O1 - Economic Development
Date Deposited: 13 Jun 2007
Last Modified: 20 Jun 2021 01:36

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