This paper studies how fiscal decentralization affects local services. It explores a 1993 reform that increased the … identification leverages cross-municipal variation in the degree of decentralization that stems from bombings during WWII …. Decentralization reduced local spending but expanded municipal services, such as nursery schools. These effects are larger in areas …

Most contemporary decentralization has occurred at the local (district) rather than regional (provincial) level. Why …? We advance a theory highlighting the political incentives of central authorities to bypass the regional tier of … government in favor decentralizing to smaller, more fragmented units. Regional decentralization can better take advantage of …