Bolivia's 1994 decentralization led to changes in the geographic allocation of funds and to the development of innovative institutions of local governance. The changes in the sectoral (and geographic) allocations of public funds show a strong relationship with objective indicators of social...

This paper examines whether decentralization increases the responsiveness of public investment to local needs using a unique database from Bolivia. Empirical tests show that investment patterns in human capital and social services changed significantly after decentralization. These changes are...

This paper examines whether decentralization increases the responsiveness of public investment to local needs using a unique database from Bolivia. Empirical tests show that investment patterns in human capital and social services changed significantly after decentralization. These changes are...

Significant changes in public investment patterns - in both the sectoral uses of funds, and their geographic distribution - emerged after Bolivia devolved substantial resources from central agencies, to municipalities in 1994. By far the most important determinant of these changes are objective...