IMPACT OF DECENTRALIZATION REFORMS IN PAKISTAN ON SERVICE DELIVERY—AN EMPIRICAL STUDY

By bringing decision making closer to people, decentralization is expected to improve governance and service delivery outcomes. Yet, the empirical evidence on the impact of decentralization on macroeconomic performance and public sector size presents a mixed picture. However, the findings of cross‐country studies in the literature are sensitive to the way decentralization is defined, and how its extent and impact are measured. This article avoids the unwanted effects of incomparability and aggregation in cross‐country analysis. We use a unique panel data set from 183 villages in Pakistan to analyze the impact of decentralization reforms implemented in 2001 on the provision of services—street paving, construction of water canals, sanitation sewer lines, and school facilities. Our results show that the magnitude of provision of all services increased significantly following decentralization reforms. We further show that the four services are impacted differently and service delivery improvement is not uniform, but not in ways that conform to the hypotheses of patronage theory. Copyright © 2011 John Wiley & Sons, Ltd.