Decentralization in Public Service Provision: Evidence from a Natural Experiment in the Education Sector in Colombia.

Abstract:

There is a long-standing debate on whether the decentralization of government services improves the quality of their delivery. This paper exploits a natural experiment in Colombia whereby the administration of the education sector was decentralized to municipalities with populations over 100,000. By comparing municipalities above and below this threshold through a regression discontinuity design, I am able to estimate the effect of administrative decentralization on learning outcomes in public schools. I find that for those municipalities close to the cutoff, decentralization has a negative impact on student learning measured through performance on the high school exit exam. In order to understand mechanisms, I undertake a case study of the decentralization process in La Guajira, a region characterized by low institutional capacity that due to mismanagement of its resources recently lost administrative control of its education sector. Through interviews corroborated by administrative data, I find that decentralization impacts education through various channels, including the ability and the incentives to appoint qualified teachers, assign resources, contract with private providers and monitor schools.
Last updated on 11/01/2018