Working Paper
Foreign Aid and Decentralization

Donor support for decentralization comes in two main categories: recommendations at the policy level and project activities at the programming level. At the policy level, donors promote decentralization by recommending greater autonomy for subnational actors. That is, they advocate for reforms that increase the extent (or ‘quantity’) of decentralization. At the programming level, donors implement projects intended to improve the capacity and accountability (or ‘quality’) of decentralized governance. This paper’s argument is twofold. First, donors have had modest impacts on the quantity of decentralization where they have engaged in policy reform because the variables that shape the extent of decentralization are found primarily in the contexts—the history, politics, social realities, and economic conditions—of partner countries. Second, decentralization quality may be improved by effective design and implementation of donor programmes and projects, but systematic variation in the efficacy of programming is compromised by measurement challenges and conflicting donor emphases.