Decentralised Development

In this paper we start with an evaluation of the various advantages and disadvantages of decentralisation (in the sense of devolution of power to local agencies and communities), and also of the conditions that predispose towards success or failure in beneficial decentralised development. In particular we have focussed on the argument that in governance structures control rights should be assigned to people who have the requisite information and incentives, and at the same time will bear responsibility for the (political and economic) consequences of their decisions. We try to provide a balanced assessment of the efficiency and equity effects of such assignments of control rights and how they operate differently under different initial conditions.