Publication: Peru : The Decentralization Process and its Links with Public Expenditure Efficiency
Decentralization in Peru is an ongoing process that is in its infancy and faces key challenges. This study aims to take stock of the process and identify these challenges. The main goal of the report is to help think through these issues with a view of identifying priorities and opportunities for fruitful engagement in this area. Much of the stock-taking serves as an introduction to the topic for the general reader and draws on what has become by now extensive secondary literature. The report distils the key challenges of the decentralization process and adds value in three specific areas. A first distinct contribution of this report is to highlight the importance of political economy factors in explaining the ebbs and flows of the decentralization process. Second, the report provides new data on truly decentralized spending as opposed to deconcentrated as well as on public spending per capita across districts. Third, this report provides a novel analysis of the efficiency of public spending across departments in Peru. The report compiles measures of public sector performance and efficiency for education, health, and transport across all departments. The overall institutional framework provides enough reasons for reconsideration an area where the Bank could add value. To be clear, this report does not call for new rushed legislative initiatives to address the perceived shortcomings in the institutional set up. What is called for is the creation of spaces for inter-institutional and inclusive dialogue to help establish a consensus on some basic principles. Only then will changes to the current institutional framework be appropriate. The mechanism to share natural resource revenues among levels of government has contributed to obfuscate the decentralization process.
“World Bank. 2010. Peru : The Decentralization Process and its Links with Public Expenditure Efficiency. Public Expenditure Review (PER);. © Washington, DC. http://openknowledge.worldbank.org/entities/publication/8d1e7258-28fb-5b5b-98fd-ff526ad01f80 License: CC BY 3.0 IGO.”