The Importance of Being Local? Administrative Decentralisation and Human Development

We examine the human development consequences of transferring responsibility for public service provision from state to local governments in India using state-level variation in the timing of administrative decentralisation reforms. We find that devolving responsibility for health and education functions does not improve child mortality or school completion. Further, partial devolution of service responsibility, without concomitant authority over personnel or taxation, results in a significant worsening of neonatal, infant and under-5 child mortality. Our results cannot be attributed to differential pre-trends, omitted variables bias, or heterogeneous treatment effects.