The Role of Local Governments’ Efficiency in Decentralized Public Service Delivery : Evidence from a Randomized Intervention in Rural Russia

While previous literature has found that the effect of public services decentralization on quality of delivery and satisfaction is ambiguous, little evidence has been provided regarding the role that the efficiency of local governments may play in enhancing a decentralization reform. To shed light on this issue, we exploit a randomized intervention directed towards enhancing local governments’ efficiency in three regions of rural Russia (Adyghea, Penza and Perm) at the onset of a major decentralization reform. We found that the intervention increased satisfaction levels with decentralized services only in the region with relatively higher ex-ante experience with decentralized and participatory decision making (Penza). Moreover, we find that settlements with high pre-treatment accountability levels were differentially benefited by the intervention. Overall, our findings suggest that short-term interventions do not translate into higher satisfaction with local public services. Rather, it appears that enhancing local managerial efficiency in delivering public services is a long-term process and that intensive interventions translate into higher satisfaction when they are provided to local governments with relatively longer institutional experience of formal self government and higher levels of accountability