The central purpose of this book is to analyse the optimal allocation of local public goods or services (for example garbage collection, police, fire brigades and medical services) in large urban agglomerations and the allocation consequences of increasing competition in the provision of them....

Decentralizing the allocation of public goods by giving funds directly to communities takes advantage of local information concerning needs, but decreases the accountability over how funds are used; leaving funds open to misuse or capture by local elites. In Indonesia, the World Bank attempts to...