Working in decentralised service systems: challenges and choices for the Australian aid program

International relief Policy Foreign aid Australia


Public services have been decentralised in most countries where Australia provides aid. This means Australia, like other donors, must be willing and able to engage effectively with developing country governments at all levels to improve service delivery. To ensure sustainable improvements, this engagement should carefully coordinate support for governance reforms with assistance to strengthen or expand service delivery systems.

As the World Bank has observed, done well, decentralisation can result in more efficient and effective services for communities. However, done poorly, or where the context is inappropriate, decentralisation may have negative effects. This evaluation builds on the Office of Development Effectiveness’s 2009 evaluation of Australian aid for service delivery. It answers important questions about whether Australian aid has appropriately considered the role of subnational authorities, including specific issues identified in 2009. It assesses how well Australian aid has addressed the challenges of decentralisation, with a focus on the major sectors of education, health and infrastructure.

This evaluation utilised a clear methodology, applied it consistently, and draws together a range of evidence to provide a balanced account of Australian aid performance. It concludes that Australian aid is beginning to respond to the challenges of supporting service delivery in decentralised contexts, but notes that results are mixed and there is room for further improvement.

The evaluation suggests Australia needs to improve its country-level analysis, program planning and design to better address decentralisation. In particular, there is a need to carefully assess short-term service delivery needs against long-term structures and incentives for governments to achieve sustainable service delivery and meet sovereign responsibilities. Australia needs to get the right balance of engagement with different levels of government, and appropriately address both supply and demand aspects of service delivery, especially to improve equity.



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