In the Shadow of Administrative Decentralization: The Impact of Devolution on Subnational Service Provision

Abstract

Decentralization is often regarded as a panacea for achieving good governance. Yet few studies have explored how devolution (to subnational governments) affects policy agendas. In this article, we investigate how devolution affects two aspects of public service provision—economic growth and environmental protection based on the experience of China. The results show that the devolution simultaneously promotes local economic development and damages the environment. These mixed effects can be attributed to the administrative mechanism of the interaction between devolution and the distribution of government attention, which is more concerned with outcomes that can be observed in the short run rather than the long run. Our results highlight the complexity of governance and demonstrate the architecture for an effective policy framework design.