Contradictions and Constraints in Chile's Health Care and Education Decentralization

Proponents of social service decentralization often claim that transferring service administration to lower levels of government facilitates increases citizen participation and governmental accountability while improving allocative efficiency and equity in service distribution. Using the cases of health and education decentralization in Chile, this article evaluates whether and under what conditions social service decentralization programs are likely to deliver on these promises. It discusses the tensions between equity and efficiency goals and how these may play out given different accountability mechanisms in local public choice, principal-agent, and real-world "hybrid" decentralization models. The case studies illustrate the difficulty of balancing the need for central standards and funding with local autonomy, but suggest that accountability mechanisms that emerged following Chile's transition to democracy in 1990 led to improvements in both equity and efficiency in decentralized service administration.