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Poor Places, Thriving People
Decentralization is a formal arrangement to improve external accountability at the local level. Through local elections, citizens acquire a direct stake in decision making (World Bank 2003). Decentralization can enhance transparency and discourage corruption (Fisman and Gatti 2000). Another motive for decentralization is the hope that lagging areas’ citizens will consider themselves more included in the political process. Decentralization is not advanced in MENA. Instead, the region’s subnational government structures fall into one of two classes: • In the typical case, the country or economy has a two-tier subnational administrative structure. Intermediate-tier deconcentrated administrative units, appointed by and accountable to the center, have a substantial public service delivery function. Locally elected authorities have a much more limited mandate: to cover road maintenance, solid waste management, recreation services, markets, and so forth (e.g., the Islamic Republic of Iran, Jordan, Tunisia, and the West Bank and Gaza). • In the alternative case, elected local councils themselves share power with the deconcentrated units of centrally controlled ministries (e.g., Egypt and the Republic of Yemen). The high level of centralization in MENA’s government structures is evidenced by local governments’ low share of public spending. Figures for MENA economies are well below those of comparator middleincome countries and the world average (figure 7.2). Moreover, central governments often impinge on local administrations’ financial management. FIGURE 7.2
MENA’s Local Governments Spend Far Less Than Those in Comparable Economies 40 35 percentage of total public spending
30 25 20 15 10 5
MENA economies Sources: World Bank 2007; Tosun and Yilmaz 2008.
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