When Decentralization Works: Leadership, Local Needs, and Student Achievement

C. Kirabo Jackson

No 34216, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies when decentralization improves public service delivery. I analyze a Chicago reform that awarded select principals greater autonomy over budgets and operations while holding resources largely unchanged. A meta-analysis of similar reforms shows substantial heterogeneity, including both positive and negative effects. Building on insights from public finance, contract design, and psychology, I argue that the returns to autonomy depend on the capacity of local decision-makers (i.e., principals in this context) and the alignment of their objectives with those of central authorities. Event-study estimates show that, on average, increased autonomy improved achievement by about 0.1 standard deviations, effects comparable to resource-intensive interventions but achieved at minimal cost. However, deconvolution analysis reveals substantial heterogeneity, with both negative and positive effects. Design-based evidence supports the theoretical predictions; high-performing principals benefit more, reallocating resources effectively (e.g., reducing class sizes), and schools with atypical student populations benefit more and may tailor services to local needs. These results highlight that local capacity, aligned incentives, and heterogeneity are central to the success of decentralization reforms.

JEL-codes: H75 H77 I2 J0 (search for similar items in EconPapers)
Date: 2025-09
New Economics Papers: this item is included in nep-lab
Note: ED LS PE
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w34216.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:34216

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w34216
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().