Should low-income countries decentralize their COVID-19 responses?

SHOULD LOW-INCOME COUNTRIES DECENTRALIZE THEIR COVID-19 RESPONSES?

by Katrina Kosec and Tewodaj Mogues | July 10, 2020

As countries respond to the COVID-19 pandemic, some have centralized decision-making, while others, including the United States and Germany, have left key policy choices to state governments, or even municipalities—allowing for individualized measures. These varied strategies have sparked a debate about the merits of decentralized service delivery in pandemic response. The OECD notes that this approach can work if sub-national governments receive sufficient support and there is adequate coordination across levels of government.

Can this work for low-income countries? They are incredibly vulnerable to the impacts of COVID-19 and in dire need of effective measures to protect public health and well-being, and to sustain their economies. But while some support a decentralized approach for low-income countries, others say it would hamstring recovery efforts.

The picture so far has been mixed. While China eventually had impressive results in responding to COVID-19, its decentralized administrative system initially led to a slow response by the Wuhan local government—with grim outcomes for the world. India, meanwhile, after starting out with a centrally-directed pandemic response, is now taking up a decentralized approach, with the merits of this shift yet to be seen. And rising authoritarianism has led some to suggest local governments are better suited to lead the provision of COVID-19 related services.

What should we expect from decentralized pandemic approaches in low-income countries going forward? Our recent paper published in World Politics casts light on these issues. It considers how, in the 2000s, decentralization in a low-income country—Ethiopia—affected not only productive services (e.g., those that boost individuals’ incomes), but also social services that are of intrinsic value to citizens’ lives beyond their pocketbook. We identify distinct effects on each.

As COVID-19 has spread, a lot of attention has focused on how well governments—central or local—deliver productive services that avert economic disaster and get citizens safely back to work. But social services such as food transfers for the most needy, clean drinking water and sanitation, or programs to prevent intimate partner violence are also crucial to supporting vulnerable populations during the crisis. Our results suggest that a tendency to favor the former over the latter in countries lacking democratic institutions could leave important services neglected as localities respond to COVID-19.

Potential benefits of decentralization

Most basically, policy makers who are closer to communities they serve know more about what people want and need, and how to best deliver services. With power pushed to local leaders, policy makers in one community might try to out-do peers to prompt businesses to move in. Central governments may also demand more of local governments when they see what one enterprising jurisdiction can accomplish. All of this may improve policy outcomes.

Of course, all this depends on some basic preconditions: A reasonably functional democracy promoting government accountability; and mobility for people and firms, allowing them to “vote with their feet” by leaving underperforming areas.

When democracy and mobility are lacking

Unfortunately, many low-income countries lack functional democratic institutions and population mobility—on the latter especially now, as COVID-19 measures have restricted travel. In rural, authoritarian settings, citizens can do little when they see leaders in another area performing better. And they often lack the resources to move, or are tied to their land.

This is the case in Ethiopia, which shifted fiscal and administrative power to the local level in four of its nine regions in 2001. In our study, we assess the situation in Ethiopia several years after decentralization (in 2008) using an empirical technique called spatial regression discontinuity: We surveyed households located close to borders that separated decentralized regions from those that were not. Households on either side of the border were otherwise comparable.

The services decentralization benefits, and the ones it does not

We found that decentralization primarily improved the provision of services such as agricultural inputs and advice that increase citizens’ productive capacity, while having relatively little impact on social services such as clean drinking water, which do less to improve productivity, but contribute to other aspects of well-being.

To be sure that these results were in fact the result of decentralization, we also compared households on both sides of a border separating two regions that were both decentralized. As expected, we found no differences in service delivery outcomes. A third comparison—a historical analysis of households before the decentralization reform, on either side of the a border that would later split them into different decentralization statuses—again showed no differences in service provision prior to the reform. These analyses strengthened the reliability of our findings, showing that it is decentralization itself—not the many other things that change at regional borders—that explained the results.

The case of drinking water is distinct. While access to safe drinking water was the top public spending priority for citizens, actual public spending on water was low in decentralized areas, and decentralization brought no improvements in this sector.

The limitations of decentralization in addressing COVID-19

These findings suggest that without the means for citizens to hold leaders accountable, and without mobility, decentralized areas tilt their budgets toward productive services, and away from social services.

The results also suggest that in low-income, authoritarian contexts, delivering new COVID-19-related funds through decentralized service provision may bias expenditures toward whatever most raises incomes, from which leaders can extract rents—possibly to the detriment of other social services. When local policy makers don’t have to fear voters, their decisions prioritize making citizens maximally productive, while other priorities—such as citizens’ health and comfort, derived from social services—receive less attention.

While decentralization brings about improvements in service delivery, who benefits and how ultimately depends on whether citizens can publicly express satisfaction or discontent. When authoritarianism prevails and people can’t easily move, decentralization merely results in a more efficient execution of central government dictates—not, as development practitioners often like to say, in “power moving closer to the people.” And this will generally bias public goods provision toward goods that raise incomes of citizens most immediately, and not necessarily maximize welfare.

The COVID-19 crisis has shown how important good governance is to protecting citizens’ health and welfare, and decentralization can be a useful tool in pandemic response. But in low income countries, it may not always be the best approach. Practitioners should be cautious not to push decentralization while presuming it will make COVID-19-related programs responsive to citizens’ priorities—without understanding that certain conditions must be present for this to work.


Katrina Kosec is a Senior Research Fellow with IFPRI's Development Strategy and Governance Division and leader of PIM's research cluster on Gender, Agricultural Productivity, and Rural Transformation. Tewodaj Mogues is Senior Economist at the International Monetary Fund, and conducted this research while she was Senior Research Fellow at IFPRI. During her time at IFPRI, Dr. Mogues also led PIM's research cluster on Public Investments and Institutions.

Funding for this research was provided by the IFPRI-led CGIAR Research Program on Policies, Institutions, and Markets (PIM). This post first appeared on the IFPRI blog.


Photo: Children line up to fill water jugs at a rural village in Ethiopia. Milo Mitchell/IFPRI

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